Reference
Loans Explained
Personal loans, home loans, car loans, and business loans — every EMI formula, eligibility rule, prepayment trick, and tax benefit in plain English. No jargon. No fine print.
Introduction
A loan is money you borrow and repay with interest over time. In India, the most common loans are personal loans (unsecured, for any purpose), home loans (secured against property, for buying a house), car loans (for buying a new or used car), and business loans (for working capital or expansion). Every loan has an EMI (Equated Monthly Instalment), an interest rate (fixed or floating), a tenure, and eligibility criteria based on your income and credit score. This hub explains EMI calculations, how to compare loan offers, when to prepay or transfer your loan, tax benefits available on home loans, and how to improve your chances of approval — verified against RBI guidelines and current lender practice.
Browse by loan type
Personal Loan
EMI · Eligibility · Prepayment · Balance transfer
EMI, eligibility, comparison, prepayment, and balance transfer for personal loans — in plain English.
Home Loan
EMI · Principal vs interest · Prepayment · Tax benefit
EMI breakdown, principal versus interest, prepayment, balance transfer, and tax benefits on home loans.
Car Loan
On-road price · Depreciation · Foreclosure · Insurance
On-road pricing, depreciation, foreclosure, and how to finance a new or used car in India.
Business Loan
MSME · Mudra · Working capital · LAP
MSME loans, Mudra, working capital, and business finance options for Indian enterprises.
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Frequently asked questions
- How does a loan EMI work?
- EMI stands for Equated Monthly Instalment. It is the fixed amount you pay each month towards repaying a loan — part principal and part interest. The interest portion is highest at the start and reduces with each payment.
- What is the difference between a personal loan and a home loan?
- A personal loan is unsecured — no collateral is required. A home loan is secured against the property you are buying. Home loans therefore carry lower interest rates but require property documents and longer tenure.
- Can I prepay a loan early?
- Most Indian lenders allow prepayment or foreclosure after a lock-in period, usually 6–12 months. Floating-rate loans can usually be prepaid without penalty; fixed-rate loans may carry a charge of 1–2% of the outstanding amount.
- What credit score do I need for a loan?
- Most lenders prefer a CIBIL score of 750 or above for personal loans. Home loans are more flexible — scores above 650 may qualify with a higher interest rate. Business loans consider both the borrower's and the business's credit history.
Sources
Sources: Reserve Bank of India (RBI) loan guidelines · Bank rate announcements · Income Tax Act 2025 (home loan tax benefit under Section 24 / 80EE) · Mudra loan programme guidelines · SIDBI. Last reviewed by FinWiz24 Research Desk.