Mobiles under 15000 have become a popular consumer durable item, and with the rise of online shopping platforms, their demand has skyrocketed. However, not everyone can afford to buy a mobile with cash in hand. This is where consumer durable loans come into the picture. In this article, we will discuss what a consumer durable loan is, how it works, and what you need to know before applying for one.
What is a Consumer Durable Loan?
A consumer durable loan is a type of loan generally offered by banks and non-banking financial companies (NBFCs) to help individuals purchase high-priced consumer durables without straining their finances. The loan offers a straightforward and flexible payment structure, which helps borrowers repay their loan with ease.
As a borrower, you will need to choose a durable item you wish to purchase and submit the required paperwork to the lender. Once the lender approves your application, the loan amount will be credited to your account directly, which you can then use to buy the durable item.
How does Consumer Durable Loan work?
Consumer durable loans work by offering borrowers a flexible payment structure that is easy to repay. These loans are generally offered at a fixed interest rate, which means that the borrower will need to pay a fixed amount every month as repayment. This payment structure makes it easy for the borrower to plan their finances and repayment schedule.
Banks and NBFCs offer consumer durable loans with various repayment periods, ranging from 6 months to 5 years. The repayment period typically depends on the durability of the consumer item, with high-priced items having a longer repayment period. This means that the lender will charge a higher interest rate for longer repayment periods, making it crucial for the borrower to choose a repayment plan that suits their financial condition.
It is also essential to note that some banks and NBFCs may require you to pay a down payment amount before disbursing the loan amount. This down payment amount can range from 10% to 20% of the total purchase amount. So, if you are planning to buy a mobile under 15000, you will need to provide a down payment amount before receiving the loan amount.
What you need to know before applying for a Consumer Durable Loan
- Interest rates: The interest rates charged for consumer durable loans can vary from lender to lender. It is crucial to research and compare interest rates offered by different lenders before applying for a loan. This will help you get the best deal and save money on interest payments.
- Eligibility criteria: Banks and NBFCs have specific eligibility criteria that must be met before applying for a consumer durable loan. These criteria generally include age, income, credit score, and employment status. Make sure you meet the eligibility criteria of your chosen lender before applying for a loan
- Loan amount: Before applying for a consumer durable loan, it is essential to determine the amount you need to borrow. This amount should be based on your budget and the cost of the durable item you wish to purchase. It is advisable to borrow only the amount you need, as excess borrowing can lead to financial strain.
- Repayment schedule: The repayment schedule of consumer durable loans varies depending on the lender. It is essential to choose a repayment schedule that suits your financial condition and repayment capacity. While longer repayment periods may seem attractive, they come with a higher interest payout.
- Processing fees: Some lenders may charge a processing fee for consumer durable loans. This fee is generally a percentage of the loan amount and can range from 1% to 3%. It is crucial to factor in this processing fee before applying for a loan.
Conclusion
In conclusion, consumer durable loans are a type of financial instrument designed to help individuals purchase high-priced consumer durables without straining their finances. These loans offer flexible repayment structures that make it easy for borrowers to repay their loans with ease. However, before applying for a consumer durable loan, it is essential to research and compare interest rates, eligibility criteria, loan amount, repayment schedule, and processing fees charged by different lenders. By doing so, borrowers can get the best deal and save money on interest payments. Mobiles under 15000 have become a popular consumer durable item and can be easily purchased with a consumer durable loan.