The What, Why and How of Consumer Durable Loans

by Gopal Gidwani on March 30, 2017 · 0 comments

in Financial Planning

 

Consumer Appliances

Being a proud owner of small luxuries in life is no longer an impossible dream. You can easily upgrade your television or refrigerator, purchase a laptop, or install an air conditioner in the living room with consumer durable (CD) loans offered by most financial institutions in India.

CD loans are Equated Monthly Installment (EMI) based financial resources provided for purchasing consumer durables. Some of the products you can purchase using such loans include air-conditioners, televisions, refrigerators, washing machines, mobile phones, laptops, and much more.

Here are five features of CD loans.

1. Affordability
When you apply for a consumer durable loan, you do not have to pay a large down payment. Furthermore, some of these are available at 0% interest, which makes repayment easier and affordable.

2. Minimal documentation
Compared to other loans, such as loan against property (LAP), CD loans require minimal documentation. This enables you to conveniently and quickly purchase products like phones without a credit card.

3. Absence of collateral requirement
CD loans are unsecured loans. This means you do not have to mortgage your personal asset while availing of a loan. Therefore, in case you fail to make timely repayments, you do not face the risk of losing your personal asset. But this could have an adverse effect on your CIBIL score.

4. Higher loan amount
Lenders provide CD loans for a minimum amount of INR 8,000 and up to a maximum of INR 5 lakh. This ensures you are able to purchase your desired product without being limited by lack of funds.

5. Eligibility and documentation
If you are between 21 and 65 years old, you can apply for a consumer durable loan. You will have to submit basic documentation like Know Your Customers (KYC), repayment mandate, and the cheque for your first EMI at the time of application.

Benefits of CD loans

  • Low processing fees
  • Minimum down payment
  • Easy repayment due to longer loan tenure

If you want to buy any consumer durable product like a TV on loan you do not have to worry about arranging finance for making your purchase. You may approach a reputed and reliable lender to avail of a CD loan and easily purchase consumer durables on EMI without having to block you credit card limit.

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