Banks are coming out with unique loans to attract more customers. Right from Refrigerator, to music system to washing machine, you can buy anything. The demand for such loans witness a sharp rise during the festive season. 0% loans schemes are popular during this time. This loan is however available only with nationalised banks.
The quantum of the loans varies from one bank to another. However, most banks offer loans between Rs 10,000 and Rs 100,000. For instance, Punjab National Bank offers up to 90 per cent of the cost of the article, subject to a maximum of Rs 100,000.
The minimum amount of loan offered is Rs 5,000. Syndicate Bank offers up to 80 per cent of the invoice value of the products purchased or 10 months gross salary, whichever is less, subject to a maximum of Rs 200,000.
The maximum limit is Rs 100,000 for pensioners. Then there is UTI Bank, where the minimum amount is Rs 25,000 and the maximum is Rs 200,000, provided it does not exceed 85 per cent of the cost of the product.
A loan can be taken for a maximum period of 60 months. UTI Bank, however, offers it for a maximum period of 36 months. Under SBI's 'Festival Loans' scheme, money is offered for only up to 12 months.
The rate of interest on consumer durable loan is lower than the interest on a personal loan. So, taking this loan makes more sense. The rate of interest varies between banks and also depends on the prevailing market conditions.
Customers can obtain application form either in person from the bank or apply online. Banks charge a nominal 1% fee on the loan amount as processing charge. The processing takes 3-5 days.
* Terms and conditions may vary from bank to bank.