Why Home Loans?
Home loan is simply a large loan that a home buyer uses to purchase a home. It is the most common form of financing for real estate transactions.
Home loan is a loan provided by a financial institution to finance the purchase/ construction/ renovation of a residential property. In a changing Indian society, one looks at home loans as an option to create wealth. Pay EMI instead of Rent if you can afford the EMI as per your cash flow. By taking a loan one build an asset and because the price of the house is expected to rise over a period of time you create capital appreciation as well, but be sure to invest at the right time at the right price or the capital will take a long time to appreciate.
However, as it is written in many books, take a loan to buy a House which provides shelter, or is leased. Don't buy and keep as a non earning asset, it is a bad investment decision to take.
To get a Home loan one needs to execute a formal document which proves the legal claim or lien on your property that your lender holds as security for the money you borrowed. There are two people involved in a mortgage, you and the lender. You pledge the property as security for the repayment of the money you borrowed, but you do not transfer title to the lender. However, if you do not pay the debt as agreed the lender, through a court proceeding, can compel the sale of your property to pay off your debt.
Why Personal Loans?
A personal loan is a sum of money that an adult person borrows to meet his financial needs and requirements. A loan that establishes consumer credit and is granted for personal use; usually unsecured and based on the borrower's integrity and ability to pay. An individual can take an easy personal loan or a guaranteed personal loan for a variety of reasons. Everyone will think of personal loan at one stage or another in life to meet their various needs. In simpler terms, unlike a car loan or a home loan, a personal loan can be put to any use by the beneficiary according to his/her discretion. The loan can be repaid like all other loans through the equated monthly installment (EMI) process where a fixed amount is paid each month.
Taking a personal loan is the easy part of the transaction, but before doing so one needs to ask oneself whether the loan is actually required. One must not use money just because it is available.
Why car loans?
The first thing you need to know, before availing for car loan, is the type of car you want and see if it suits your estimated budget. Narrow your choice of cars, to two or three. Compare rates of all banks and get their best rates. Also ask for recommended dealers for the car(s) of your choice to see which dealer is giving you the best deal.
You repay the loan in equated monthly installments (EMIs), comprising of principal amount and the Interest Rate. The EMI depends upon the loan amount, the interest rate and the tenure of the loan.
Also don't just evaluate the deal based on monthly EMIs. Calculate how much you will be paying over the tenure of the loan. This in turn is a function of Interest rates.
You "have-to" insure your car. It is against the law to drive an uninsured car. You must get an insurance policy for a year's duration, after which you have to renew it. The amount of insurance is equal to the market value of the vehicle and not the book value of the vehicle.
