Loans

Each bank provides a variety of customized loan products and borrowing facilities to meet your needs.

These loans and borrowings can be grouped as below:

1) Time bound loans: All those loans payable in installments come under this category.Your Home loan, Car loan,Education loan,Personal or Consumption loan,etc.

2) Demand loans: The loans that are to be repaid at any time as and when the banks demands.The running facilities like Overdraft, cash Credit(pledge or hypothication),etc fall in this category.

3)Credit cards: These cards come with a preloaded limits up to which you can use them and they get replenished and the original limit is restored when you repay any amount.

4) Guarantees: This is the bond given by a bank on your behalf to secure a contract of a work order .The guarantee period runs usually for a maximum period of 10 years.

5)Credit Letters: This is usually a piece of letter issued by the bank for helping you to source your supplies or goods for a short period :usually restricted to180 days only.

The loans are usually sanctioned based on the applications and other related documents that you submit to the bank. But the discretion to sanction is purely with the individual banks as each of them has their own polices and procedures.However, the following aspects which are vital and common for all cases, do matter in the sanction for your application.

1) Credit worthiness: whether the borrower satisfies the eligibility criteria framed for that loan.The skill and experience levels and the character and the past record (in the same bank or other banks) will be a pointer to this.Discrete enquiry conducted on the loan applicant  for this purpose.

2) Capacity to repay: this is determined by analyzing the data of income and expenses projected by you.

3)  Capacity to bear the risk in case of failure of the flow of income or funds. 

Don't be over smart by giving false information and rosy picture about your proposed or existing business! Your bank will check your records through a variety of methods.

If you fail any one of these aspects, the possibility of your bank saying NO to you is much higher.

But if the last item is missed, bank will insist for collateral security and/or a good surety.

If a surety or guarantor is provided by you, they will apply the above yardsticks to assess that person as if he/she is the borrower: because, you and the surety are treated at par for any borrowing purpose.