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Consumer Durable Loan – Eligibility, Benefits & How to Apply for Consumer Durable Loan?

  • Karan Batra
  • Feb 19 2022
  • 8 minutes
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Having a good home is one of the many life goals of a person. However, a home is not just about having a roof and walls but also filling it with the necessary comfort. An essential part of these comforts is the consumer durable goods like refrigerators, air conditioners, washing machines, etc. These consumer durables are a necessity in every household however, they do cost a small fortune which is not often easier to shell out of the pocket. This is when the consumer durable loans come into the picture.

Given below is the meaning of the consumer durable loans and a few relevant details regarding the same.

What is a consumer durable loan?

To explain in simplest terms, consumer durable loans are a form of personal loans that are offered by lenders. These are unsecured short-term loans sanctioned for the purchase of the necessary consumer goods as mentioned above and are available at a relatively affordable rate of interest. Consumer durable loans are a quite popular loan segment and the documentation needed for these loans is minimal. These loans are also processed faster as compared to home loans or car loans and also have the option of no-cost EMI as per the guidelines of the lenders. 

Who is eligible for consumer durable loans?

Consumer durable is like a personal loan and is extended to individuals and HUFs. Every lender has its eligibility criteria that have to be met by the applicants to be eligible for consumer durable loans. Some of the common eligibility criteria required by most lenders are detailed below.

Category Details
Age Minimum age – 18 years or 21 years (depending on the lender)Maximum age – 60 years for salaried applicants (65 for self-employed applicants) 
Residential status Resident Indian
Income Minimum Rs. 15,000 – 20,000 per month (as per lender’s guidelines)
Credit score As consumer durable loans are unsecured loans, lenders also look for a good credit score (usually 750 or more) as well as a clear repayment history without any delays or defaults in repayment of past credit taken by the applicant
Employment Most lenders require the applicants to have a minimum work experience of 2 years. In the case of self-employed individuals, lenders look for a stable or profitable business for a minimum of the past 2 years or 3 years depending on the lender.  

What are the documents needed for consumer durable loans?

The documents needed for consumer durable loans are quite basic, usually the KYC documents. These documents have to be submitted by the applicants along with the loan application form to start the processing of the loan. Some of the common documents needed by most lenders are,

a. Identity proof

Some of the common documents that can be submitted as identity proof are,

  • Passport
  • Aadhar card
  • PAN card
  • Voter Id

b. Address proof

Some of the common documents that can be submitted as address proof are,

  • Passport
  • Ration card
  • Latest utility bills
  • Registered rent agreement 

c. Income proof

Lenders also require the applicants to provide income proof as part of the documentation. This income proof assures the lenders of the repaying capacity of the applicants. Following documents can be submitted as income proof for consumer durable loans.

  • Form 16
  • Latest salary slips
  • ITR for the past 2 years
  • Bank statements for the past 6 months showing the credit of the salary
  • Financial statements of the business

d. Passport size photographs

The applicants are also required to submit 2 passport size photographs along with the above mentioned documents.

What are the features and benefits of consumer durable loans?

Some of the key features of consumer durable loans are mentioned below. 

Amount of loan

The amount of loan that is sanctioned for consumer durable loans is usually up to Rs. 5,00,000. Some lenders also provide loans for higher amounts depending on their guidelines or the eligibility of the applicants. Some lenders also require the applicants to make payment for margin money which is usually between 10% to 20% of the value of the product to be bought out of the loan. 

Rate of interest

The rate of interest for consumer durable loans is approximately between 12% to 22% per annum. These rates are in line with the personal loan segment. Moreover, some lenders also provide these loans at 0% interest rates especially during festive seasons or as part of any promotional offers.


Consumer durable loans are in the nature of short-term loans. The tenure of these loans is different in the case of different lenders as per their guidelines. These loans are usually offered for the period of 6 months to 36 months.  

Processing fees

Processing fees are the nominal charges levied by the lender which are related to the processing and sanction of the loan. These charges are usually in the range of 1% to 3% of the loan amount. 


Consumer durable loans are in the nature of unsecured loans. This implies that the applicant does not need to provide any collateral for these loans. The need for no collateral makes the loan processing faster and easier. 

How can a person apply for consumer durable loans?

Consumer durable loans can be applied easily through offline or online modes. The details of the same are mentioned below.

Online mode

The online mode of applying for a consumer durable loan is through internet banking, mobile banking, or through the website of the respective lender. Applicants can login to their internet banking or mobile banking account and then apply for the consumer durable loan directly from their respective account. Another option is to apply for the loan through the website of the lender. The applicant will have to select the ‘Apply now’ on the consumer durable loan page on such a website and provide the necessary details like personal details and professional details. After providing all the necessary details, the applicants will have to click on ‘submit’ to proceed. The representative of the lender will contact the applicant for details regarding the further loan process.  

Offline mode

The offline process is the traditional process of loan application where the applicant will have to visit the nearest branch office of the lender and apply for the loan there. The applicants will have to provide the necessary documents along with the application form to complete the loan application. After the loan is approved, the amount will be credited to the account of the borrower and it will have to be repaid in fixed EMIs within the agreed tenure of the loan.  


Consumer durable loans are a very popular loan segment offered by the majority of lenders whether banks or NBFCs, MFI, etc for purchasing the necessary home appliances or electronic devices. These are quick loans that are usually unsecured. Consumer durable loans are a good option for people as they do not have to worry about the huge cash outflow for the necessities in their homes. They can get the necessary financial assistance from the banks at relatively lower costs and repay the same through flexible EMI options


Can the borrower foreclose the consumer durable loans?

Yes. Most lenders allow the borrowers to foreclose the consumer durable loan before the completion of the tenure. Such foreclosure is allowed usually after 6 months from taking the loan. Borrowers are required to pay a penalty for such foreclosure which is usually between 2% to 4% of the outstanding loan amount.

What are the modes of paying the EMIs for consumer durable loans?

The EMIS for consumer durable loans can be paid through,
a. Online transfer through NEFT, RTGS, or IMPS through internet banking or mobile banking facility.
b. Standing instructions using the NACH mandate.
c. Autopay facility through internet banking
d. Post-dated cheques or demand drafts

Is credit score and credit report important while applying for a consumer durable loan?

Yes. Like any other loan, consumer durable loans also require the applicants to have a good credit score and a healthy credit report. These loans are usually unsecured loans and hence, a good credit score and a healthy credit report assure the lenders of the creditworthiness of the applicant, making the sanction of the loan quicker.

When are the consumer durable loans disbursed?

Consumer durable loans are disbursed within 24 to 48 hours after approval.

What is the basic difference between a personal loan and a consumer durable loan?

The basic difference between a personal loan and a consumer durable loan is the purpose of the loan. Personal loans can be used for any personal reasons like medical emergencies, weddings, travel, etc. Consumer durable loans can be used only for the purchase of consumer durable goods.

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