Cashlify Finance Training: Types of Loans

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Questions and Answers

What type of loan is typically used for purchasing a vehicle?

Home Loans

Instant Personal Loan

Auto Loans (correct)

Business Loans

Which document is NOT typically required for verifying income when applying for a personal loan?

Recent salary slips

Form 16

Latest bank statements

Utility bills (correct)

What distinguishes a personal loan from a home loan?

Personal loans are always secured.

Personal loans do not require collateral. (correct)

Home loans are short-term loans.

Home loans are typically repaid over a shorter term.

Which of the following loans is secured against property?

Loan Against Property Signup and view all the answers

What type of loan would generally require proof of income?

Home Loans Signup and view all the answers

Which statement regarding Business Loans is correct?

Business loans can be either secured or unsecured. Signup and view all the answers

Which type of loan is specifically provided without any proof of income?

Instant Personal Loan Signup and view all the answers

What is a common repayment period for auto loans?

3 to 7 years Signup and view all the answers

What is the primary purpose of submitting income tax returns for self-employed individuals when applying for a loan?

To verify the applicant's income and financial stability Signup and view all the answers

Which document is NOT typically required to confirm the employment status of an applicant?

Recent photographs Signup and view all the answers

Which document can serve as proof of age for a loan application?

PAN Card Signup and view all the answers

What type of document is required to formally apply for a loan with the lender?

Loan application form Signup and view all the answers

Which of the following documents is used to verify an applicant's signature?

Signed check Signup and view all the answers

For business loan applications, which of the following documents is essential for proving the identity of the business owner?

Government-issued ID Signup and view all the answers

What is the purpose of submitting statements of existing loans when applying for a new loan?

To assess the applicant's current liabilities Signup and view all the answers

Which of these documents is typically NOT required as proof of address for a loan application?

Bank statements Signup and view all the answers

What is the primary purpose of a credit report?

To evaluate your creditworthiness and financial history Signup and view all the answers

Which document is not typically required to prove financial stability?

Employment Certificate Signup and view all the answers

What document is crucial for formally applying for a loan?

Loan Application Form Signup and view all the answers

When might a lender require guarantor documents?

When the loan applicant has a poor credit history Signup and view all the answers

What may lenders accept as an alternative to income proof?

Proof of business profitability Signup and view all the answers

What is the primary purpose of providing financial statements during a business loan application?

To evaluate the financial health and performance of the business Signup and view all the answers

Which document is NOT typically required as proof of business registration?

Income Tax Returns Signup and view all the answers

What is the function of KYC documents in the context of a business loan application?

To comply with Know Your Customer regulations Signup and view all the answers

Why is a business plan or project report important for a loan application?

It provides a clear understanding of how the loan will be used and expected returns Signup and view all the answers

Which of the following documents would be required to provide security for a loan?

Collateral documents Signup and view all the answers

What type of information can be derived from bank statements during a loan application process?

Cash flow, income, and financial stability Signup and view all the answers

Which document serves to confirm the ownership structure of a business?

Memorandum of Association Signup and view all the answers

What information does a credit report provide during a business loan assessment?

Creditworthiness of the borrower Signup and view all the answers

What is the primary purpose of providing bank statements for the last 3-6 months when applying for a loan?

To assess financial stability and behavior Signup and view all the answers

Which document can be used as proof of employment status?

Employment Certificate Signup and view all the answers

What type of financial documents are typically required for assessing the financial health of a business?

Profit & Loss Statements Signup and view all the answers

For what purpose are collateral documents provided when applying for a loan?

To provide security for the loan Signup and view all the answers

When alternative criteria are used, which document is not typically required for instant personal loans?

Proof of Income Signup and view all the answers

Which of the following documents is essential for verifying an applicant's identity in loan applications?

Passport Signup and view all the answers

What information do lenders evaluate using a credit report?

Creditworthiness Signup and view all the answers

Why might a lender require additional documents beyond the standard list when assessing a loan application?

Due to specific lender policies or circumstances Signup and view all the answers

Study Notes

Types of Loans

Personal Loans: Used for personal expenses like medical bills or vacations; typically unsecured with fixed monthly payments.
Home Loans (Mortgages): For purchasing or constructing a home; secured against the property with long-term repayment options.
Loan Against Property: Secured loan issued against property; long repayment terms with fixed or variable interest rates.
Auto Loans: Used to purchase vehicles; secured against the vehicle with repayment terms usually between 3 to 7 years.
Business Loans: Supports various business activities like expansion; can be secured or unsecured with varying repayment terms.
Instant Personal Loan: Quick loans for personal or business needs without income proof; usually unsecured with 2-3 years repayment.

Personal Loan Application Requirements

Identity Proof: Required documents include passport, driver's license, or government ID to verify identity.
Address Proof: Utility bills or rental agreements used to confirm residential address.
Income Proof: Varies by employment status:
- Salaried: Salary slips, Form 16, and bank statements.
- Self-Employed: Income tax returns, balance sheets, profit & loss statements.
Employment Proof: Employment certificate or offer letter needed to confirm current employment status.
Photographs: Recent passport-sized photos for identification.
Age Proof: Documents like birth certificate or PAN card to confirm minimum age requirement.
Signature Proof: Documents to verify signature, such as PAN card or signed check.
Loan Application Form: A completed form to formally apply for the loan.
Existing Loan Documents: Details of any current loans for assessment of liabilities.
Other Documents: Any additional documents specific to lender requirements.

Business Loan Application Requirements

Identity Proof of Applicant: Similar to personal loans for business owners.
Address Proof of Applicant: Ensures the owner’s residential address is verified.
Business Registration Proof: Documentation like Certificate of Incorporation and GST Registration confirming legal existence.
Address Proof of Business: Utility bills or rental agreements confirming the business location.
Financial Statements: Audited balance sheets and profit & loss statements for previous 2-3 years.
Bank Statements: Recent bank statements evidencing business cash flow.
Income Tax Returns: Tax returns for the prior 2-3 years for both business and individual applicants.
Ownership Documents: Partnership deed or memorandum of association confirming business ownership structure.
KYC Documents of Owners: PAN, Aadhaar, and other identity proofs to comply with regulatory requirements.
Business Plan or Project Report: Details on loan purpose, objectives, and repayment strategy.
Collateral Documents: Property papers or asset documentation if collateral is required.
Credit Report: Recent credit report to assess borrower’s creditworthiness.

Instant Personal Loans

Requirements without Income Proof:
- Identity Proof: Same as standard loans for verification.
- Address Proof: Utility bills or other documents confirming residency.
- Photographs: Recent images for documentation.
- Bank Statements: Recent statements to determine financial behavior.
- Credit Report: To evaluate creditworthiness.
- Alternative Financial Stability Proof: Fixed deposit receipts or rental income statements as proof of stability.
- Employment or Business Proof: Documentation related to employment or business operations for self-employed applicants.
- Loan Application Form: A completed form for processing the application.
- Guarantor Documents: Identity and income proof of a guarantor if required.
- Additional Documents: Any relevant documents that a lender may request based on individual circumstances.

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Description

Explore the various types of loans available in Cashlify's finance training. This quiz provides insights into personal loans, their purposes, and characteristics such as secured versus unsecured arrangements. Understand these financial tools to make informed decisions.