A consumer durable loan is a special type of personal loan that can be used specifically to finance the purchase consumer durable goods such as electronic gadgets, household appliances, etc. Typically this personal loan can be obtained for amounts of up to Rs. 15 lakh with a repayment tenure ranging between a few days to 36 months. Also known as consumer loans, these may be available at 0% interest rate subject to key terms and conditions specified by the lender. Like other personal loans, a consumer durable loan requires minimal documentation and features quick approval as well as disbursal.

Consumer Durable Loan Eligibility Criteria

Most lenders (banks and NBFCs) offer consumer durable loans to both salaried self-employed individuals. The eligibility criteria for a consumer durable loan may vary depending upon the applicant category that you belong to as well as from one lender to another. However, generally the following key eligibility criteria need to be considered when applying for a consumer durable loan:

Types of Consumer Durable Loans

A consumer durable loan is a form of credit that can be used to purchase consumer durable goods such as household appliances, electronic gadgets, etc. The most common type of consumer durable loan is termed as an installment loan. This type of personal loan differs from an EMI conversion using a credit card/debit card as no card is used to complete the purchase and or set up an installment-based payment plan. Details of an installment loan and its various subtypes are as follows: Installment Loans: These are the most common form of consumer durable loans and are paid back in weekly, fortnightly, monthly or bi-monthly installments according to a preset timetable. The interest rate charged on these installments may be fixed or vary with time. Additionally, these consumer loans may or may not require security or collateral. Based on these unique features, installment loans may be further divided into the following types:
Fixed rate consumer durable loan: Most consumer loans offered to borrowers are fixed rate loans similar to the mechanism using which other personal loan interest rates are applicable. As the name suggests, these consumer loans have the same interest rate throughout the loan tenure.
Variable rate consumer durable loan: In a variable rate consumer loan, the interest rate charged on the outstanding balance varies with the change in market interest rates. As a result, your interest payouts will vary as well. However, these loans usually have limits on how high or low the interest rate can be.
Secured consumer durable loans: Secured loans are those which are secured against assets as collateral. Secured consumer loans in India usually involve hypothecation of the item being purchased. Some banks also provide consumer durable loans secured using other instruments such as fixed deposits, RBI Bonds, gold jewellery, LIC policy, etc. Thus, interest rates are usually lower for secured consumer durable loans. If you are unable to repay the loan for any reason, the lender is entitled to claim your security to make up for their loss.
Unsecured consumer durable loans: Unsecured consumer durable loans are the most common. The borrower does not have to provide any kind of. Interest rates for unsecured loans can be higher than the secured variant. However, most banks and financial institutions that offer consumer durable loans do so at competitive rates that are at par with personal loan interest rates. In some cases such as during festivals you might even qualify for special offers with nil or zero processing fees and an effective interest rate of 0%.