9 Questions about Consumer Durable Loans Answered
Adding small luxuries is no longer a dream that’s impossible to fulfil. Quite a number of banks and NBFCs provide consumer durable loans to fulfil your dreams. You can use the consumer durable loan to buy all sorts of appliances – from the laptops to music systems, from mobile phones to televisions, from the refrigerator to washing machines – all consumer durable products can be bought with a consumer durable loan.
Let’s throw some light on what consumer durable loans and their benefits are:
Consumer durables are consumer products that are usually big-ticket items and are not purchased frequently as they are made to last for an extended period of time.
Consumer products are of two types:
Durables, as the name suggests is meant to have an extended life and they do not wear out quickly. Therefore, they cost a lot. An example of a consumer durable is a washing machine. It is expensive, it is built to last, it does not wear out easily even if you use it multiple times.
An example of a non-consumer durable product is the detergent powder. It is cheaper, it is made to be used for a short period of time, it depletes and once the detergent bag is empty, you need to purchase it again.
A consumer durable loan is a finance option provided by banks and other financial institutions to buy consumer durable products like refrigerators, washing machines LED TVs, air-conditioner, furniture, or microwaves. You can take a consumer durable loan to fund your purchase and then pay the borrowed amount back in easy EMIs spread over a flexible loan tenure.
Depending on your choice of lender, you may get it on 0% or at a low-interest rate. Financing could also be up to 100% finance of the cost of the product.
The consumer durable loan covers a wide range of products. From household necessities like a refrigerator to luxury electronics like a feature-rich smartphone.
The products that a consumer durable loan finances could include the following:
(1) Washing machine
(2) Microwave oven
(4) Cooking range
(5) Music system
(6) Gadgets like a tablet, laptop, desktop
(7) Air conditioner
(10) Water purifier
(11) Inverter and generator
Consumer durable loans are unsecured loans. Therefore, lenders check your annual income and credit history to assess your financial capacity to repay the loan.
Therefore, it is recommended that you check your CIBIL score on a regular basis to ensure that there are no errors in the credit report.
You need to submit these documents while applying for a consumer durable loan:
(1) Income proof
(2) Address proof
(3) Identity and signature proof
(4) Recent photographs
If you are above 21 years and earn a monthly income of ₹ 15,000 to ₹ 25,000 (varies from bank to bank), you are eligible for a consumer durable loan.
Interest rates for a consumer durable loan vary from lender to lender and typically starts from 11%. If there are some promotional offers, some lenders may even charge 0% interest. However, some lenders may be a nominal fee ranging from 1-3% of the loan amount to process the consumer durable loan application.
Lenders usually provide 80% to 90% financing on the price of the product. The rest of the money, that is 10% to 20% you need to pay from your pocket as a down payment for the purchase. However, there are some lenders who provide 100% financing.
MoneyTap is an online lending platform that offers personal loans to buy consumer durable products. You can get a loan approval of up to ₹ 5 Lakh – Use the money to buy big-ticket consumer durables.
You can withdraw as little as ₹ 3,000 and as high as your approved limit – Withdraw what you need and pay interest only on the amount you use and not on the entire approved limit.
No down payment – Use the money to finance 100% your purchase.
Flexible repayment options – Repay the borrowed amount in flexible EMIs spread over a loan tenure ranging from 2 months to 36 months.
The growing middle-class population is the driving force of the increasing demand for consumer durable loans. Getting consumer durable loans is an easy and smart way to upgrade your lifestyle without dipping into your savings. The documentation is minimal, the approval is quick, and disbursal is sooner than you expect.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at [email protected].