Consumer Durable Loan

A Consumer Durable Loan is an easy financing option that is made available for the purchase of durable items. The purchases with a consumer durable loan can be related to an individual’s home, lifestyle or to any household and electronic item. This loan is helpful to people, who face a credit crunch after buying a new home. With the consumer durable loans, one can easily furnish his or her new home with any household necessities including new appliances like microwave, refrigerator, or a washing machine amongst others. With this financing option, people do not need to save money to buy their dream products. Thus, consumer durable finance adds more to your life by making your life more comfortable and luxurious.

• Easy approvals with minimum or no down payment
• Low processing fees and affordable interest rates
• No security required to keep at stake
• Minimum Documentation
• Easy Foreclosure
• Available for a tenure of 3 to 60 months

To get a consumer durable loan, you have to fulfil the following eligibility criteria:

• Credit Score: A consumer durable loan is an unsecured loan, thus requires no collateral. However, the repayment ability of the borrower is taken into consideration. Thus, a credit score is required to check the financial stability of the borrower.
• Income: Another criteria considered is the income of the borrower. A regular income depicts the repaying ability of the borrower. 
• Age: The borrower eligible for a consumer durable finance must be between the age group of 21 to 65 years of age.
• Work Experience: A borrower must have two or more years of work experience to avail a consumer loan.

Consumer durable loans can be used to buy AC, mobile, refrigerator, washing machine, computer, laptop, furniture, microwave, kitchen appliances, etc. With the help of consumer durable loans one can buy big and pay in small monthly payments. Banks offer a few different types of personal loan based on the popularity of items, terms and conditions, and an end use obligation free loan product.

Thus, an individual can use any of the following loan types to buy the consumer durable product you need.

Personal loan is an unsecured medium term loan. An individual can avail a personal loan for any personal purpose. This is the primary reason why many people opt for personal loans to buy the consumer durable goods they need, as a result its popularity has also increased in the last 5-6 years. Also, to avail a personal loan no collateral is required. Thus, from the time an individual purchases the good, the ownership of the product lies with the individual.

A credit card is a form of consumer loan, which a consumer avails with prior approval. A credit card usually allows spending up to a particular limit set by the Bank. Thus, it is important to understand the terms associated with a credit card, in order for the user to make wise use of it. If handled otherwise, by delaying or missing payments, a credit card could create a financial burden and could even affect one’s credit score. 

Though, lenders often make things easier for credit card users. At times when a purchase is made of an amount higher than the set limit, lenders convert the amount in an actual consumer loan. Though, this often reduces the actual limit set on the credit card. However, it is more advisable to use a credit card wisely in order to avoid additional burden imposed by a loan.

The most common type of a consumer loan is an installment loan that is paid back in fixed weekly, monthly, or fortnightly installments. The interest rate charged on these installments is either pre fixed or varies with time. Based on the interest rate installment loan is subdivided as follows:

• Fixed Interest Rate Loans: As per the name, the interest charged on these loans is fixed throughout the period of the loan. This is the most common way of lending consumer loans.
• Variable Rate Consumer Loans: As per the variable rate consumer loan, the rate of interest changes according to the changes in the market rates. Thus the interest charged on outstanding balances, changes with time. However, there is a set limit in the variable interest rates, as in, the maximum and minimum rate that cannot be exceeded.

One of the most bought and popular consumer durable products is mobile. Considering this fact, various banks and lenders have launched a separate loan product known as mobile loan. Nowadays, every month a new smartphone is launched, trends are changing like the speed of a bullet. Staying upgraded has become essential in today’s tech savvy world, that’s why a mobile phone loan is one of the best options for anyone to get their hands on the latest technology and show-off their new cool gadget to neighbors and friends. With instant mobile loan, you can easily get your hands on the top end device and upgrade your lifestyle.

One can apply for a mobile loan online. Various lenders provide the option of application through their website.

A lot of lenders provide consumer durable loans. Many banks have tie-ups with selected merchandise, to avoid frauds and misuse of funds. However, there are some leading banks or consumer durable loan companies that provide this type of loans. Although, the blueprint for the consumer durable loan is the same for all these banks, yet they have their protocols which may differ a bit for borrowers. Listed below are top Consumer Durable Loans providers:

HDFC Bank provides consumer durable loans to both new customers and to existing account holders. For new customers, the prescribed age is above 21 years of age for salaried individuals with a monthly income of minimum ₹ 18,000, however, existing customers with ₹ 15,000 monthly income can apply for the same. For self-employed people, minimum age requirement is 26 years with an annual income of over ₹ 1.50 Lakh as per tax records. The loan is provided for up to ₹ 15 Lakh, with maximum tenure of 36 months. 

Key features:

• Special scheme for HDFC Bank Debit and Credit card users
• Easy EMI options available
• Instant Disbursal
• Cashbacks and reward for users

Tata Capital provides consumer durable loans for the purchase of household necessities like electronic appliances and gadgets. Both self-employed and salaried individuals can apply for this loan. However, the age limit for salaried nationals is 21 to 60 years and for self-employed it is 21 to 65 years. The lender further allows borrowers to avail zero processing charges and interest free EMIs on selected products. The loan is provided in the range of ₹ 10,000 to ₹ 5 Lakh.

Key features:

• Zero percent interest rate
• Loan granted for a tenure of 6-24 months
• No foreclosure charges
• Covers under 100+ lifestyle products

Bajaj Finserv provides Consumer Durable Loans to fund household purchases. The specified age limit for the borrowers is 21-60 years with a regular source of income. The lender provides funds at No Costs EMIs on selected products. Bajaj Finserv provides funds up to 100% of the products purchased with the loan, the maximum amount granted by Bajaj Finserv is ₹ 4 Lakh. Also, customers can pay back the loan according to their own convenience between 3 to 24 months. Similar to other banks, the documentation is minimum, however, customers with EMI Network Card, have added benefit of not submitting any documents. The Bank charges processing fees up to ₹ 800.

Key features:

• Loan granted for 3-24 months
• Covers up to 100% of the product’s value
• Spread across 80,000+ stores in 1800+ cities

IDFC First Bank provides easy and quick consumer durable loans that are approved online in no time. The Bank provides loan amount ranging from ₹ 5,000 to up to ₹ 5 Lakh for a maximum period of up to 36 months. Further, the lender does not only lend fund for the purchase of electronic households but also for the purchase of furniture. The funds are granted at no cost EMI and no foreclosure amount is charged. The age limit for new customers is 21 to 65 years, and for existing customers the age is extended to 68 years.

Key features:

• Easy online application
• Allows purchase of electric items as well as furniture
• Easy processing and quick approval

You can also apply for a personal loan if you are looking for a higher loan amount than a consumer durable loan.

• Identity proofs - PAN card, Voter ID card or Aadhaar Card.
• Address proof - Passport, Driving license, Utility Bills like water, gas or electricity bills.
• Income proof - Salary slips
• Passport size photograph
• One cancelled cheque

✅Is a consumer durable loan secured or unsecured?

A consumer durable loan is an unsecured loan and does not require the borrower to keep anything as a collateral.

✅What products does a consumer durable loan cover?

Any household or electronic item can be purchased using consumer durable loan. These include microwave, refrigerator, kitchen appliances, laptop, television and cameras among others.

✅Does foreclosing a consumer durable loan impose a penalty?

There are no foreclosure charges imposed on pre-paying consumer durable loans. However, if you apply for a personal loan to buy any consumer durable then some banks charge a penalty on foreclosure of a loan.

✅What is the maximum amount granted under the consumer durable loan?

The amount that can be availed under this loan is anything between ₹ 10,000 to ₹ 15 Lakh

✅What is the tenure for opting a consumer durable loan?

The maximum tenure for which consumer loan is provided is up to 36 months.