PERSONAL FINANCE FOR PURCHASING CONSUMER DURABLES INCLUDING TWO‑WHEELERS

 

Banks are liberally financing individuals to acquire consumer durables like TV sets, Refrigerators, Music Systems, Air‑conditioners, Computers etc. and also two wheelers. Loans are extended for purchasing brand new items. The features of such loan schemes, as generally obtained in the banks are stated below. However, individual banks should be consulted before finalising any deal as the loan scheme may differ from bank to bank.

 

Eligibility         1.         Any individual having a minimum net income of Rs. 5,000/‑ per month.

2.         In respect of working couple, net income of the spouse can be considered if he/she joins as co‑borrower.

Quantum of     1.         For computing quantum of loan, the proposed borrower's age, net income, asset/liabilities etc. are

Loan                            considered.

2.         Maximum amount of loan is Rs. 3 lacs (Rs. 4 lacs if spouse is co‑borrower). However, the quantum of loan should not exceed 15 times of monthly net income/ take home pay.

Margin                        20% of invoice value.

 

Repayment                  Loan is required to be repaid within 3 to 5 years. No repayment holiday is granted.

 

Rate of Interest :        Banks are free to charge any rate of interest.

 

Processing      :           No processing charges are normally levied these days.

Charges

 

Security:                   Assets created out of loan amount shall be hypothecated in addition to co‑obligation/guarantee of a credit‑worthy person. At times approved securities with suitable margin may also be pledged.

 

Other Terms   1.        Generally, existing customers of the bank with satisfac­tory dealings of at least six months are

and conditions             considered. But in exceptional cases where the applicant can provide suitable references to the satisfaction of the bank, this condition may be waived.

 2.        In case of salaried persons, the salary should be credited with the bank branch which is arranging loan. However, sometimes mandate is also obtained from salary disbursing authority for repayment of instalments, if the above arrangement is not possible.

 3.        Two‑wheelers are to be insured compulsorily. However, in other cases insurance upto Rs. 50,000 is generally waived.

 4.        Loan amount along with margin money is generally released directly to the supplier.

 5.        Before sanctioning of loan, salary certificate/income-tax return/details of assets and liabilities of the borrower as well as co‑obligent or guarantor/proforma invoice/ usual loan application form are obtained.