We are all consumers, right? Even the biggest businessman on the planet is a consumer of several companies. The world is run by consumers! However, what does a consumer mean? A consumer is someone or an entity that buys goods or services for their personal use rather than for resale or production. Just imagine getting your toothpaste every month from a company – you aren’t going to sell that or make a profit from it. It is for your personal use, right? Now, you might know just how important a consumer is. Now, you might also understand what we were trying to say: consumers are the people who run the world. We wouldn’t survive if we weren’t consumers. That is why there is the presence of consumer courts and consumer terms, and to be honest – the consumer is always the king.
In this post, we are going to tell you something important about consumers. It is about Consumer Durable Loans, and how to get a consumer loan.
Understanding Consumer Durable Loan:
A Consumer Durable Loan is a type of loan offered by any financial institutions to individuals for the purchase of consumer durables, which are long-lasting goods intended for everyday use. These goods typically include items like home appliances (refrigerators, washing machines, microwaves), electronics (TVs, laptops, smartphones), furniture, and other similar products.
This loan is specifically designed for consumers to buy durable goods with a long lifespan and is used quite often. Let’s move forward to learn how the consumer durable loan works.
How Does a Consumer Durable Loan Work?
You will repay this consumer durable loan in a shorter span when compared to other kinds of loans, and this would be a few months to a year or two. Unlike a personal loan, or vehicle loan than could range to a period of 7-8 years, this is short. These loans would come with different rates of interest, and most importantly, this rate of interest would be based on the lender, and the CIBIL score of the borrower.
Usually, a retailer would offer these loans to you at a lower rate of interest, at times even zero rate of interest according to the promotional needs that they have.
There are lenders out there that would also ask you for a small down payment to issue the loan, while some lenders would offer 100% financing. Now, whether you would have a down payment or not would be based on the amount of loan you need and the kind of durable item that you are buying.
This loan amount would generally be linked to the cost of the durable purchase and could be differentiated based on the specific product and the lender’s policies. These loans usually have fast approval, too. The process would be simpler than it is for a personal, home, or vehicle loan. You can simply get this loan at any sales outlet.
Moreover, these loans are unsecured, which means you do not need to offer collateral or security.
Let’s understand this with an example.
You walk into an Air conditioner showroom to buy a new AC for this summer. The value of the AC is Rs. 35,000. You have only Rs. 5000 with you at the moment. You do not have enough funds.
However, the salesman at the showroom lets you know that they are linked to financers, and can get you a consumer durable loan.
*You speak to a financer who is willing to finance 95% of the AC value. This means you will be financed:
*Rs. 33250
*You need to pay Rs. 1,750 as a down payment, plus Rs. 200 to process the loan.
*You will be paying a total of Rs. 1,950 at the moment.
*The balance of the financed amount you could pay through EMIs, and the financer is offering you a 0% interest rate. You choose a 6-month EMI plan. The EMI amount you would be paying each month would be Rs. 5,541.67.
Now, that is about how a consumer durable loan works.
Who Can Get a Consumer Durable Loan?
This loan is usually available to a wide range of individuals out there, but the common eligibility criteria would be based on:
- Age
- Income
- Employment Status
- Credit Score
- Residential Status
- Bank Account
- Documentation
- Relationship with the Lender
- Promotions and Offers
- Purpose of Loan
How to Get a Consumer Durable Loan?
You would have to follow the steps that are mentioned below to get a consumer durable loan from a lender:
Step 1: Find the product that you want to buy and the exact amount that you will need in order to buy this product.
Step 2: Look for lenders through the seller or by yourself.
Step 3: Compare the best lenders out there and find the one that suits you the best.
Step 4: Ask the lender to check your eligibility so they can finance you.
Step 5: Once you are known to be eligible, avail yourself of the pre-approved offers and EMI options.
Step 6: Get all the documents you need and submit them to the lender.
Step 7: Apply for the loan – and the lender will help you through the process.
Step 8: Wait for approval.
Step 9: On approval, the finance will be deposited to the seller, and you can take your product home.
Just make sure you repay the loan on time in order to avail yourself of any future consumer durable loans.
Top Providers of Consumer Durable Loans:
There are some top lender for Consumer Durable Loans, and here is the list provided below:
- State Bank of India
- ICICI Bank
- HDFC Bank
- Axis Bank
- Bajaj Finserv
- Mahindra Finance
- Flipkart
- Croma
- Amazon
- Paytm
- KreditBee
- ZestMoney
- American Express
- Citibank
- Sundaram Finance
These are just a handful of the large number of providers out there.
Conclusion:
Now that you know everything about a consumer durable loan and how to get one, you can go ahead and avail yourself of this financial assistance! Just keep in mind that you read all the terms and conditions of the loan before you can have the money deposited for your purchase.
Related Articles You May Like to Read:
- What Are the Consumer Protections for Payday Loan Borrowers?
- How to Get Loan for Self-Employed Person?
- Types of Personal Loans in India – A Detailed Guide
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