What is A Loan?


A loan term is the length of time it will take for a loan to completely paid off when the borrower is making regular payments. Personal loans help the households meet any shortfall they experience in buying a house or a car, in children’s higher education, or even in cases of medical contingencies, among other things.

Types Of Loan

  • Personal Loans.
  • Credit Cards.
  • Home-Equity Loans.
  • Home-Equity Lines of Credit.
  • Credit Card Cash Advances.
  • Small Business Loans.

Educational Loan

Taking an education loan to supplant the cost of education abroad is the right choice. Depending on the amount and your profile, financial institutions can finance even 100% of the cost of the course. However, to the best education loan option, one needs to carefully analyze the following key aspects of the various options available. When you apply to GyanDhan, we do this analysis for you. In case you do the loan comparison yourself, consider these factors:

  1. Interest Rate: Even a 1% increase in the education loan interest rate has a substantial financial effect. Example – Loan Amount: Rs. 30,00,000, Loan Repayment in: 5 years after you graduate, Course Duration: 2 years; While at 10%, you’ll pay Rs. 9.7 lakhs in interest, at 20%, you’ll pay Rs. 10.9 lakhs – that’s a difference of 1.2 lakhs for just 1%!.
  2. Repayment Holiday/Moratorium Period: It is a specified period during the loan tenure in which the borrower is exempt from making repayments. Loans with moratorium period have a big plus, as you don’t have to worry about making repayments while you study.
  3. Tax Rebate: Education loans taken from Indian banks are special in that the entire amount paid as interest is exempt from income tax. This has a huge impact: Example – Loan Amount: Rs. 30,00,000, Marginal tax bracket: 30%, Repayment in: 5 years after graduation, Course Duration: 2 years, Interest Rate: 10%… If your loan has tax rebate, you can save Rs. 2.9 lakhs!
  4. Margin Money: The amount that you need to pay from your own pocket while the rest is paid by the bank. If a bank offers 0% margin, it means they’ll fund all your education expenses.
  5. Hidden Fees: There are numerous hidden fees that your lender might be charging you and when accumulated these will cost you a considerable amount

Car Loan

While evaluating a car loan application, lenders check your credit report to assess your creditworthiness. Many lenders also offer pre-approved car loans based on your credit score. Generally, people with credit score of 750 or above have a better chance of loan approval. Some lenders also charge lower interest rates to those having higher credit scores. Therefore, fetch your credit report from the credit bureaus or online lending marketplaces at least six months before applying for the car loan. This will allow to you to check your credit scores beforehand and give you sufficient time to take corrective measures for improving your credit score. Prior fetching of your credit report will also allow to detect errors and fraudulent transactions, which once rectified might improve your credit score and, hence, your loan eligibility


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