Introduction
A Consumer Durable Loan is a type of loan that is specifically designed to help individuals purchase consumer durables such as appliances, electronics, furniture & other household items. This type of loan is typically offered by banks & other financial institutions and can be availed of by individuals with a regular source of income. Consumer Durable Loans come with a range of benefits such as low interest rates, flexible repayment options, & quick disbursal of funds. This makes them an attractive option for those looking to upgrade their homes with new appliances or furniture.
In this article, we will discuss the features of Consumer Durable Loans including their eligibility criteria, application process & repayment options to help you make an informed decision about whether this type of loan is right for your needs.
What Is A Consumer Durable Loan
Our homes have more than just four walls and an overhanging roof. It’s where we unwind, rejuvenate and unwind with our beloved and precious loved ones. Have you realized that you could improve your home’s appearance with modern appliances without paying the cost out of pocket?
You may be looking to buy an HD TV to stream your favourite movies and sports matches, a split-air conditioner to combat the heat of summer or a sleek 3-door refrigerator for your kitchen – a durable consumer loan could help you buy the appliance you want and not have to make payment upfront
In this guide, we provide everything you need to learn regarding durable consumer loans: the eligibility criteria, documentation as well as loan amount, rates, and much more. Let’s get started.
Consumer Durable Loan?
Consumer durable loans allow you to buy large but pay a small amount. You can make the purchase and put it off until the next day.
As the name suggests, a loan can be used to finance purchases of goods such as household appliances and personal devices, among other everyday household items. Generally, a durable consumer loan can purchase air conditioners, televisions and home theatre systems, refrigerators, washing machines, modular kitchens, ovens cameras, laptops, mobile phones, and other everyday devices and appliances.
With the help of a durable consumer loan, the borrower can pay back the cost of purchasing the device between six months and 24 months. Instead of waiting years (or perhaps even several years) to save for the gadget you love, You can make your purchases today and then pay it with easy EMIs in the coming months.
What is the rate of interest for a durable consumer loan?
The interest rate on a durable consumer loan varies between 12 and 22% and can vary from one lender to the next. Specific lenders also offer durable consumer loans at no interest during promotions, such as during the festival season.
Apart from the interest rate, durable consumer loans also charge a processing fee of a small amount that can range between 1 and three per cent of the loan amount. Apart from an interest charge and processing cost, There are no other fees to pay.
What is the duration of an unsecured consumer loan?
Consumer durable loans come with flexible terms between six and thirty-six months. But, be aware that the loan duration differs from one lender to another.
What amount of loan is available?
The amount of the loan that is sanctioned differs between lenders. Lenders generally offer durable consumer loans ranging from around Rs. 25,000 to Rs. 15 lakhs. Specific lenders require you to make a down payment of between 10 and 20 per cent of the cost, and the loan pays for the rest of the price. In contrast, some lenders offer loans of up to 90% of the cost.
It is important to note that many lenders require a minimum product value. These loans for consumer-owned goods are offered only for purchases that exceed the minimum value of the product.
What are the items that are covered by durable consumer credit?
Consumer durable loans can cover an array of appliances for the home and personal devices, such as:
- Television
- Washing machine
- Air-conditioner
- Food processor, microwave oven grinder
- Cooking Range
- Refrigerator
- Inverter/UPS/Generator
- Home music system and theatre
- Dishwasher
What are the requirements for eligibility for loans to consumers?
For Salaried Individuals
To be qualified for a durable consumer loan, salaried people must meet the following requirements:
- Minimum age: 21 years old
- Age limit: 60.
- Experience in the workplace: At a minimum, two years
- Monthly income: Rs. 15,000 or more
For people in business/self-employed professionals
To be eligible for durable consumer loans, entrepreneurs, self-employed as well as people in business must satisfy these criteria:
- Minimum age: 21 years old
- Maximum agelimit: 65.
- Experience in the workplace: At a minimum of two years
- Annual income The amount is Rs. 1.5 lakhs, or greater
The conditions for eligibility will differ from one lender to another. Therefore, check with your preferred lender to find the most current eligibility criteria.
What documents do you need to get consumers who want to take out loans?
As compared to other loans, consumer loans require only a few documents. Here is a general list of documents you need to submit when seeking durable consumer credit:
- Photo ID proof Photo identity proof A duplicate of the passport/Aadhaar card/PAN driver’s license/passport/voter ID
- Address document – Copy the card issued by the Ration or Electricity account/passport.
- Income documentation
- For individuals who are salaried In the case of salaried individuals, a copy of the bank account statement for the past six months, the salary slips, and form 16
- Self-employed persons – An original copy of your bank statement for the past six months, and profit/loss reports of the company IT returns for the last two years.
You may be required to submit additional documents from your loan provider if necessary.
Can a borrower foreclose on a credit card for a consumer durable?
Yes. Consumer loans can be pre-closed. However, the cost of foreclosure and duration vary from one lender to the next. Lenders generally do not impose any penalty for foreclosures concerning durable consumer loans. However, if the lender does impose a foreclosure penalty in the range of 2 to 4 per cent of the outstanding principal, be sure that you contact the lender to inquire about the foreclosure costs and procedures.
