A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt.

Banks are a type of financial intermediary whose principal service among many others is to provide loans to its customers who could be individuals/ corporations/ self-employed Professionals/ public/ private companies etc. The loans are in turn funded by the deposits of its existing customers.

Types of Loans

• Two Wheeler Loans : Leading banks in the public and private sector are providing two wheeler loans, right form mopeds to motorbikes. These loans are available at attractive rates and best prices to attract new customers. Quite a few banks are offering online loan application for the ease of prospective clients. Private sector banks are ahead of their public sector counterparts in terms of efficiency of application and processing of loans. On the spot loan offers are given by various banks and other flexible schemes to suit the needs and pockets of customers.
   

• Car Loans : Almost all leading nationalised as well as private banks offer car loans at attractive rates for their customers. These banks have tied up with eminent automobile manufacturers to provide best deals; flexible car schemes are being offered to suit the varied needs and financial standing of customers. Banks are providing quick application and hassle free processing of loans to attract new customers and maintain the old ones.
   

• Commercial Vehicle Loans : Banks offer attractive loans for commercial vehicles including trucks, tippers, buses, light commercial vehicles, three wheelers etc. Range of services are offered by banks like financing of new vehicle and refinancing the used ones. Banks have also tied up with leading commercial vehicle manufacturers to provide fast and easy loans to its customers. Simple documentation and quick turnaround time ensure convenience of prospective clients.
   

• Professional Loans : Leading Banks are catering to the need of self employed professionals like Doctors, Chartered Accountants, Interior Decorators, Architects etc. by offering them professional loans at lucrative rates.
   

• Trade Loans : Banks are providing trade loans to traders / businessmen to help them set up or expand their business.
   

• Construction Equipment Loans : Banks customise construction equipment loans to suit the needs of all its clients, right from new entrepreneurs to large business houses. Leading banks provide value added services by tying up with leading construction equipment manufactures to provide a wide variety to its clients. Such loans can also fall under the category of business loans. 
   

•  Farm Equipment Loans :  Banks are providing a lot of financial assistance to farmers in order to provide impetus to the agricultural sector. Banks are entering into agreements with leading commercial vehicles /tractor manufacturers to provide easy finance to farmers.
   

• Medical Equipment Loans : Banks are targeting top- notch doctors as new segment of customers by offering them attractive medical equipment loans. This loan is primarily taken to either purchase new equipment or taking over the existing one.
   

• Home Loans : Housing is the fastest growing sector in the current times. Banks are cashing on this phenomenon by offering easy home loans at attractive rates. Home loans products is offered by almost all banks; right from loans for purchasing real estate to buying a flat, from home improvement to home extension loans. The EMI and rate of interest is arrived at, keeping a number of factors like, the loan amount, market value of the the land or building, tenure of loans etc.
   

• Mortgage Loans : Banks provide loan against mortgage of property on an attractive rate of interest. Businessmen, self employed professionals, salaried customers are all eligible to apply for the loan. It enables the borrower to apply for loan against a fixed asset.
   

• Personal Loans : Personal loans are a unique retail loans product offered by a number of banks to cater to distinct and diverse needs of the customers. Secured and unsecured loans are provided by banks to its esteemed customers. The main purpose of such a loan is to meet any kind of personal need or expense. A number of personal loans like marriage loans, consumer durable loans, festival loans are increasingly becoming popular. Easy loans are provided at attractive rate of interest for widening the existing customer base.
   

• Real Estate Loans : Buying a property necessitates in depth knowledge of real estate and choosing the right kind of loans. Several banks are stepping up their exposure to real estate. These banks are entering into agreements with builders for provision of real estate loans. The Scheme mainly caters to builders / promoters / developers of real estate. According to RBI figures loans to builders, along with retail credit (like home loans, credit cards and personal loans) constitute a chunk of banks' total loan portfolio.
   

• Student Loans : Students loans is one of the fastest growing retail banking product. Almost all public and private sector banks are offering student loans at attractive rates for meritorious and needy students for studying both in India as well as abroad. Loans are available for graduate/postgraduate/technical courses; banks are increasing the flexibility of this loan in terms of payback period to attract more students. Students loans cover the tuition fee, hostel fee, library charges, administrative charges etc.
   

• Travel Loans : Planning a vacation with family and friends has never been more easy. Procurement of sufficient funds to bear travel expenses has been made smooth with quite a few banks offering easy travel loans. The loan meets any kind of travel expense such as cost of ticket, hotel stay, visa, airport tax, purchase of basic travel quota, etc.