At present, commercial banks in India are providing retail loans to the customers for various purposes.
The consumer loan is a retail loan scheme which provides for purchase of consumer durables like televisions, refrigerators, microwave ovens, furniture items etc.,
Salient features of the scheme:
- It is a loan scheme for purchase of consumer durables
- It is available to both salaried employees and non salaried employees
- Loans are available upto Rs. 1.00 lakhs
- The repayment should be made within thirysix months and the repayment is by means of equated monthly instalments - EMI
- The articles purchased out of the loan namely; refrigerators, micro ovens etc., become the securities for the loans
- The rate of interest is as decided by the bank
- Normally processing charges upto one percent is collected by the bank with a minimum of Rs. 250.00
Attractive features:
- The loans are made available from all branches of the bank
- The longer repayment period for consumer loan ensures lower equated monthly instalments and enables the borrowers to opt for a bigger and better consumer durable articles
- In the case of prepayment of any amount, no prepayment charges
- There are no hidden charges
- Some banks provide even a second loan under this scheme, even before closure of the first loan
- At present state of the art internet banking facility is available which provides loan liability details on any given day during the tenure of the loan.
- Many banks adopt simple documentation procedure and the loans are sanctioned quickly and disbursements are immediately made
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