BORROWING-RELATED PRODUCTS

Definition: Borrowing is an act of taking money and paying it back over a period, providing flexibility to repay in small instalments.
Details: Borrowing helps meet financial goals when savings are inadequate, with Equated Monthly Instalments (EMI) being a popular repayment mode.

DOCUMENTS REQUIRED FOR OBTAINING LOANS

Proof of Identity: Passport, Aadhaar card, Driving License, Voters ID, or PAN Card.
Proof of Residence: Aadhaar Card, Leave and License Agreement, Utility Bill, or Passport.
Income Proof: Latest 3 months bank statement, salary slips for last 3 months.
Other Requirements: 2 passport size photographs, collateral proofs.

Collateral: A property or asset offered as security to the lender in exchange for a loan.
Lien: A lender's claim to a borrower's collateral, allowing the lender to seize assets if loan repayments are stopped.

Personal Loan: For any purpose, without collateral security.
Vehicle Loan: For purchasing new or second-hand vehicles.
Education Loan: For students and families to meet higher education expenses.
Gold Loan: Given on providing gold as security.
Housing Loan: For house-related purposes, such as construction or renovation.
Agriculture Loan: For farmers to fund agricultural operations.
Consumer Durable Loans: For purchasing consumer durables like televisions or refrigerators.

Capacity: The borrower's ability to repay the loan.
Character: The borrower's trustworthiness to repay the loan.
Capital: The borrower's personal investment in the business.
Collateral: The security provided by the borrower.
Conditions: The intended purpose of the loan and the borrower's financial situation.

Credit Score: A measure of an individual's creditworthiness, used by lenders to evaluate loan applications.
Credit Information Report (CIR): A report developed by credit bureaus, such as CIBIL, to enable lenders to evaluate loan applications.
Credit Bureau: A company licensed by the RBI to collect and maintain credit information, governed by the Credit Information Companies (Regulation) Act of 2005.

Tip 01: Manage debt with the right mindset and discipline, avoiding unnecessary purchases.
Tip 02: Choose a mortgage loan tenure that allows for manageable repayments.
Tip 03: Use credit cards only for payment facilitation, not as a means to borrow money.
Tip 04: Avoid treating credit cards as free money.
Tip 05: Change lifestyle to accumulate savings and avoid debt.
Tip 06: Use debit cards instead of credit cards to avoid overspending.
Tip 07: Spend within means and buy only what can be afforded.