Consumer Durable Loan

What is a Consumer Durable Loan?

As per Consumer durable loan meaning, it facilitates significant purchases with manageable payments, allowing you to address immediate needs that you've deferred for the future. These loans are specifically designed to finance the acquisition of household appliances, personal devices, and other essential items commonly found in households. Typically, consumer durable loans cover a wide range of frequently used appliances and gadgets.

Through a consumer durable loan, the borrower has the option to spread the cost of the appliance purchase over a period spanning from six to twenty-four months. Rather than waiting months or even years to save up for your desired gadget or appliance, you can seize the opportunity to make your purchases today and repay them through convenient EMIs over the subsequent months.

Types of Consumer Durable Loans

Now you know what is consumer durable loan. Here are the types of this loan:
   

• Installment Loan:
The availability of these loans and their terms depend on the lender and prevailing market conditions. They may come with either a fixed or variable interest rate. Repayment options include weekly, bi-weekly, monthly, or quarterly instalments. Additionally, no security or collateral is necessary to secure this mortgage.
   

• Credit Card:
Another type of consumer durable loan commonly utilised by customers for purchases is a credit card. With pre-approval, cardholders can make purchases without concerns about their financial situation.

Key Features of Consumer Durable Loan

• Consumer durable loans are categorised as high-cost credit due to their very high interest rates, which are determined based on your total income and other financial records.
• The majority of consumer durable loans are approved within 24 hours, with some instant loans receiving approval in as little as 10 minutes.
• The borrowing limit for consumer durable loans typically ranges from Rs. 5,000 to Rs. 5 lakhs.
• Consumer durable loans are short-term financial products, as they are typically repaid within 36 months or less. 

Benefits of Consumer Durable Loan

• To apply for a consumer durable loan, you must access an online portal and provide your personal information. There's no need to visit a bank or any other financial institution.
• Utilising an online loan portal typically results in an approval decision in less than 60 seconds.
• Repayment of the loan can be achieved through fixed monthly instalments over a predetermined period.
• No collateral is required as security for the loan.

Eligibility Criteria for Consumer Durable Loan

• Age: Minimum 21 years and Maximum 65 years
• Minimum Monthly Income: Rs. 15,000
• Experience in the current organisation: Minimum one year

Self-employed Professionals:

• Age: Minimum 21 years and Maximum 68 years
• Minimum Income: Rs. 1.5 lakh
• Employment Stability: At least two years in the current business

Documents Required for Applying for Consumer Durable Loan

Below are the typical documents needed to apply for a consumer durable loan:

◦ Completed application form accompanied by passport-sized photographs
◦ Proof of Identity: Aadhaar Card, PAN Card, Driver's License, Voter ID, or Passport
◦ Proof of Address: Aadhaar Card, Passport, Bank Account Statement, Lease Agreement, Property Purchase

Agreement, Utility Bill (dated within the last three months), or Driver's License
◦ Proof of Income:
        a. For Salaried Individuals: Salary Slips, Bank Account Statement, or Form 16
        b. For Self-Employed Individuals: Bank Account Statement, Previous Year Income Tax Return (ITR), Profit & Loss Statement, and Balance Sheet
        ◦ Any additional documents requested by the lending institution.

Rate of Interest Offered by Top Banks on Consumer Durable Loan

Here's the interest rate on consumer durable loans provided by top lenders.

Fees & Charges on Consumer Durable Loan

How to Apply for a Consumer Durable Loan?

Once you've confirmed your eligibility, proceed with these simple instructions to apply for a consumer durable loan:
1. Visit the website or app of your chosen financial institution and select the "Apply Now" option.
2. Enter your mobile number to complete the OTP verification process.
3. Fill in your personal and professional information.
4. Upload the required documents as requested.
5. Upon approval of your consumer loan application, a representative from the bank will contact you directly for additional verification.

Factors Affecting Consumer Durable Loan Interest Rate

Below are several crucial factors that impact the interest rate applied to an individual:
• Credit Score: The credit score, a 3-digit numeric representation of one's credit report or history, typically ranges from 300 to 900. A higher score, such as 750 or above in the case of CIBIL score, enhances the likelihood of securing a consumer durable loan with favourable terms, including a lower interest rate, reflecting greater creditworthiness.
• Loan Amount: Higher loan amounts often result in the applicant being subject to a higher interest rate. This is because larger loan amounts typically entail higher monthly instalment payments, increasing the lender's risk of default.
• Loan Tenure: Longer repayment periods usually correlate with higher interest rates, while shorter tenures tend to attract lower rates.
• Current Outstanding Debt: Applicants with substantial existing debt may face a higher interest rate on consumer loans, as this raises concerns about the borrower's ability to manage additional financial obligations, increasing the lender's risk.

Conclusion

Using a consumer durable loan, you have the flexibility to acquire the latest appliances and gadgets immediately, deferring payments for later. With repayment periods spanning from 6 to 36 months, you can manage the loan through budget-friendly EMIs. These loans offer a savvy solution to acquiring items that might otherwise strain your finances. With streamlined documentation, swift approval, and competitive interest rates, consumer durable loans represent the optimal choice for enhancing both your home and lifestyle.