Types

You must know the types of secured loans to be assigned for business purposes.

• Mortgage (Housing) loans:  This loan is for against properties. Of course, you can get a borrower to purchase a new property in this loan type. In this loan type, the property under question is known as collateral.

• Vehicle loans:  Loans taken to purchase a new or used vehicle are known as vehicle loans.

• Financial Instrument Loans:  Of course, loans should be taken by providing financial instruments for fixed deposit and insurance policies.

• Title Loans:  A title under a property is temporarily transferred to the lender for the future of tenure for a loan. When the loan is fully applicable for properties such as houses, land, or a vehicle is to revert the borrower.

• Non-recourse loan:  This type of loan is for the property to offer the collateral and only be available to the lender against the borrower's options.

• Pawn-broker loan:  In this loan type, individuals offer it against property such as jewelry for six months to a few years. It is an unofficial loan taken with little or no documentation requirements.

Documents Required

To apply for secured loans, you must submit the following documents to the bank or authorities. Ensure you provide the necessary or mandatory documents for secured loan applications.

• PAN Card

• Proof of income: Salary slips for the most recent three months

• Proof of residence: Rental agreement, Passport, Landline bill, Post-paid mobile bill, Bank statement

• Proof of identity: Driver's license, Aadhaar, Voter ID, Passport

• Proof of age: Driver's license, PAN card, Passport

• Bank statements for the last six months

• Proof of employment: Offer letter, Form 16, Relieving letter

The above lists may vary depending on the time, loan type, and terms.

Eligibility criteria

To apply for secured loans, you must also know the eligibility criteria. Before applying, you have to notice the eligibility criteria in detail.

• Of course, the applicant must be above 18 years or older

• Must be a resident of India

• Banks and lenders require a minimum annual income of Rs.3 lakh annually.

• Income can be generated from regular salary and business income

• The business must have running and generating profits for the last three years to apply

• Applicant must have assets, and value must match of loan required

Advantages

• Lower Interest Rates
  Secured loans carry out lower interest rates because it is secured against collateral. The EMI rate is low for the borrowers, and no financial risks should be found. Of course, it does not cover the balance, and the lender has to work on personal finance.

• A larger amount of loan
  The security offered by the collateral includes a car or home. Of course, it becomes possible to take a larger loan, and liability by the collateral should be noted. It is subjected to carry about certain conditions and taken minimum term age of the borrower.

• Better and more flexible terms
  Processing is faster for secured loans. However, it is secured by collateral and taken into the borrower's creditworthiness. Most banks should be operating on foreclosure, and extension of tenure and failure to meet EMI dates should be adjusted. Some lenders insist on the minimum term, allowing you to close the loan prematurely.

• It can be used for debt consolidation.
  Secured loans are an ideal choice for handling financial crises anytime. Of course, it can be used for debt consolidation and includes short-term loans for various purposes. Apart from this, it will enhance your cibil score and help you get new loans in the future as well.