Are you looking to upgrade and furnish your home? Maybe buy a new home theatre system or the latest gadget, but are short on funds? Fret not. A consumer durable loan will make it all possible for you. Long-term consumer credit makes buying home appliances and other luxury items possible. These are essentially small loans that consumers avail of to buy big-ticket consumer durable items.
With the unavailability of liquid cash for many, the spread of cost towards buying goods becomes more accessible with an instant loan. Not only do these come in flexible lending periods, but the rate of interest is often zero to nil.
Read on to find out how to secure an instant loan to buy your desired household appliances.
What is a consumer durable loan?
Before we go in-depth about the instant consumer durable loan, let us take a moment to understand what a consumer durable product is. Durables, also known as durable goods, are products that do not wear out quickly and thus do not have to be purchased often. They are expected to last 3 to 5 years at the least.
A consumer durable loan is a finance option for buying expensive consumer durable household items like a television, air-conditioner, washing machine, and even furniture. These loans provide the applicant with a unique option of financing and are generally offered at affordable interest rates.
Financial institutions usually provide up to 80-90% of the product’s actual price, meaning you will have to make a down payment of 10-20% of your purchase cost. On the other hand, some lenders might provide up to 100% financing and generally don’t ask for down payments.
What are some advantages of the instant consumer durable loan?
Affordable interest rates:
While choosing a consumer durable loan, the interest rate is one of the most important factors to consider. Consumer durable loans are generally available at a lesser interest rate than personal loans and credit cards. Some financial institutions even offer these at zero percent interest! This makes this instant loan a lucrative option for middle-income families.
The application process for a consumer durable loan is simple. Although the loan application process differs from one lender to another, the application process is pretty simple, easy, and mostly digital to get an instant loan. What makes the process even simpler is the minimal documentation needed to avail of the loan.
A tenure will determine the number of instalments and the amount you need to pay every month.
The tenure for a consumer durable loan is typically between 3 to 24 months. This again varies based on the lender’s rules and the product you have applied for the loan. The shorter tenure you choose, the higher will be your EMI and vice versa.
Minimal Foreclosure Charges:
If an applicant wants to repay the loan before the end of the tenure, they need not worry. The foreclosure charges on the instant consumer durable loan are either zero or between 2 to 4% of the principal amount. Again, the foreclosure charges on an instant consumer durable loan are dependent on the lender’s policies.
Who is eligible for a consumer durable loan?
The applicant may be at least 21 years of age and not older than 65. If the applicant is salaried, he should have around 2 years of work experience.
What are the documents needed to apply for a consumer durable loan?
Keep the following handy to get an instant loan approval:
– Photo Identity Proof- A copy of voter ID/Passport/Aadhar Card/Pan Card.
– Address Proof- A copy of utilities bill/Passport.
– Salary Slips- A copy of salary slips for the last three to six months. Self-employed individuals must show the past two years’ bank statements and income tax returns.
Some things to keep in mind
· Many financial institutes have hidden costs like processing fees, prepayment fees, etc. Therefore, make sure you know all the terms and conditions before applying for the loan.
· You may lose out on the cash discount on the product if you apply for an instant consumer durable loan to assist your payment.
· The worth of the product is another thing to consider before applying for this form of an instant loan. First, you should find out the product’s shelf life, along with its various features and specifications. Then, only if it suits your requirements should you go ahead with the loan, as the resale value of a consumer durable is sparse.
The final word
With the advent of paperless money and digital transactions, consumer durable loans are gaining popularity with the millennials. This is mainly due to the usage of credit cards to buy luxury items.
Despite that, various financial institutes still offer durable loan schemes. If you are considering applying for one, it is advisable to look at the interest rates, processing fees, and other charges from various lenders and select the one that offers you the best deal.