Everything You Need To Know About Consumer Durable Loans

If you have visited a brick-and-mortar store recently or even hopped on to your favorite eCommerce site to buy an item, a common option you would have seen is to pay the price for the product in EMI or Equated Monthly Installments. These days, no matter the type of product you are availing, if its net cost goes over ₹10,000 and in some cases even ₹5000, chances are that you can avail a loan on it.

These type of short term loans are known as consumer durable loans in the world of finance, and if you find yourself among the turmoil of noticing them multiple times but knowing very little about them, this article is for you, as we will be covering everything you need to know about consumer durable loans in India, in today’s issue.

What Is a Consumer Durable Loan?

Repayment of most consumer durable loans in India extends all the way from a few months to 5 years (60 months) depending on the lender of your choice, and similar to a personal loan, they also require you to submit minimal documentation and come with quick and instant disbursal.

Eligibility Criteria of Consumer Durable Loans

  • Applicants need to be between the ages of 21 years and 68 years.
  • Must have a minimum income of ₹15,000 per month in case of a salaried employee with a current professional experience of 2 years at a minimum.
  • Must have a minimum of ₹20,000 per month in case of a self-employed professional with a business vintage of two years at a minimum.
  • Must be a permanent resident of India.
  • Must have eKYC documentation, that is, Aadhar Card, PAN Card, or Driving License.

Types of Consumer Durable Loans

  1. Fixed Interest Rate Consumer Loans

The first and most popular type of consumer loan is a fixed interest consumer loan, and as the name implies, in this type of loan, the rate of interest remains fixed throughout the tenure of the loan. The interest rate being charged is pre-mentioned in the loan documentation, and till the tenure is complete, the consumer needs to pay the same EMI amount every month.

2. Variable Interest Rate Consumer Loans

The second type of consumer loan available in India is a variable interest rate consumer loan. Unlike a fixed interest rate consumer loan, the rate of interest in a variable consumer loan keeps changing from time to time, either depending on the market conditions or a reducing balance basis. In either of these cases, the EMI amount of the loan generally tends to vary between months, and although this system is not so popular, it can be found in some instances.

3. Secured Consumer Loans

In simple terms, a secured consumer loan can be understood as a type of consumer durable loan in which you are required to pledge any asset or collateral in order to avail of the loan amount. Generally applicable in instances where the loan amount is considerably high, secured consumer loans generally arrive with a higher rate of approval and also lower interest rates since, in this scenario, the risk for the lender is significantly less.

4. Unsecured Consumer Loans

Last but not least is an unsecured consumer loan, and as the name suggests, in this type of consumer loan, you do not need to pledge any asset or collateral to avail of its services. The lender simply checks your credit score and, based on that, your loan is approved or rejected. Generally, an unsecured consumer loan arrives with a higher rate of interest, and if you have a low credit score, a lower chance of approval.

Key Features of Consumer Durable Loans

  1. Instant Approval

Since these loans typically require minimal documentation and collateral, the lender instantly checks your eligibility and approves your application.

2. Flexible Loan Amount

The loan amount in most consumer durable loans stretches all the way from ₹10,000 to ₹5 lakhs, thus covering a wide spectrum of products and services.

3. Flexible Tenure

Most consumer durable loans arrive with flexible tenures ranging all the way from 6 months to 36 months.

4. Minimal Documentation

Almost all consumer durable loans have a completely online application process, thus entailing that the customer needs to submit minimal documentation and skip all the hassle associated with a traditional loan application.

5. Competitive Interest Rate

Due to the wide presence of lenders, consumer durable loans offer some of the most competitive interest rates in the market.

How To Apply For a Consumer Durable Loan?

  1. Offline Process
  • Visit a brick-and-mortar store near you and enquire about the facility of a zero cost EMI.
  • If available, enquire about the eligibility criteria and application process.
  • Submit your documents, fill out the application form and share your bank details.
  • Once approved, you will be able to purchase the product, and EMIs will be automatically deducted from your bank account.

2. Online Process

  • Login to Google PlayStore and search for the term “personal loan or consumer durable loan.” You will come across a list of various plunders which offer this service.
  • Select a lender of your choice and visit their website.
  • Initiate the application process by first sharing your Aadhar linked mobile number.
  • Share the OTP you just received with the lender and proceed with the application by sharing your personal information, which includes your full name, email address, Aadhar Card Number, PAN Card Number, etc.
  • Share your income information with the lender, as in salaried or self-employed, followed shortly by uploading your income certificates as proof.
  • Enter the loan amount you require, fine-tune the repayment cycle and complete your application.




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