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What is Retail Loan?

Retail loans are those loans which are given by the banks to individuals so as to meet there personal needs, retail loans are smaller in size as compared to corporate loans. Given below are various types of retail loans which are given by the banks.
A retail Loan can be define as “Loan Given to individuals to meet their needs as opposed to corporate to meet their business of commercial imperatives”. A retail loan may be Secured or Unsecured.

Secured Loan
As the name suggest,the loan offered to individual is secured or backed by some assest.A housing loan offered can be secured against the house which financed.A car financed shall be hypothecated against amount of loan.Every Loan Which is secured is well supported by some asset which value is equal or more than loan amount.

The other Type of Secured Loans are:-
» Education Loans
» Housing Loans
» Vehicle Loans
» Loans Against share and Debentures

Unsecured Loan
The Loans which are given to customers without taking any security are called Unsecured Loans.such loans disbursed to those individuals who are wel reputed and having good banking transaction in the bank.The Loans like medical holiday are generally unsecured.

The other Type of Secured Loans are:-
» Personal Loans
» Some educational loans
» Loans to some professionals and self-employes Persons.

Retail Loans - Characteristics

» These are small size loans
» These loans meet the needs of a large number of customers with well diversified portfolios
» The target customers are generally individuals or small organizations
» These loans offer standard products to customers. Very rarely a customer's requirement is customized
» The operations of retail credit are centralized in most of the banks
» Bankers can make quick credit related decisions because of decentralization
» These loans are designed to cover varied segments of risks
» High volume business
» High number of transactions

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