In retail and commercial banking, what are the main types of loans commonly offered by banks to their customers?

Introduction / Context:
Banks earn a major part of their income by granting various types of loans to individuals and businesses. Interview questions often ask candidates to list or recognize the common loan products offered by banks. This question provides several alternatives and expects you to identify the option that correctly combines the main types of loans normally available in banking practice.

Given Data / Assumptions:

• The context is commercial and retail banking services.
• Banks lend money to individuals, firms and other entities against agreed terms.
• Loan products may differ by purpose, security, tenure and repayment structure.
• The question looks for typical examples rather than an exhaustive legal list.

Concept / Approach:
Common loan products include term loans for a fixed period, overdrafts and cash credit for working capital needs, housing loans or mortgages for property purchase, personal loans for consumption and vehicle loans for buying cars and other vehicles. A correct option should mention multiple such categories rather than a single narrow product. Options that talk only about deposits, subsidies or just one facility do not correctly describe the range of loan types offered by banks.

Step-by-Step Solution:
Step 1: Recall from practical banking that customers can obtain loans for housing, vehicles, business working capital and personal purposes. Step 2: Look at option A, which lists term loans, overdrafts, cash credit, housing loans, personal loans and vehicle loans, covering different common needs. Step 3: Examine option B, which mentions savings and current accounts. These are deposit products, not loans. Step 4: Examine option C, which refers to government subsidies. Subsidies are transfers, not loans that must be repaid with interest. Step 5: Examine option D, which restricts lending to credit cards only, ignoring many other major loan categories.

Verification / Alternative check:
If you visit a typical bank website, you will find separate links for home loans, vehicle loans, personal loans, education loans, business loans, overdrafts and cash credit facilities. These closely resemble the mix shown in option A. While banks may also offer credit cards and other specialized products, the set described in option A is a representative list of core loan offerings. Therefore, it matches real world practice better than the other options.

Why Other Options Are Wrong:
Option B is wrong because savings and current accounts involve the customer depositing money with the bank, not the bank lending money to the customer. Option C is wrong because subsidies are often provided by governments and do not have to be repaid like loans. Option D is wrong because credit cards are only one form of unsecured revolving credit and do not represent the full spectrum of bank loans; banks would not restrict themselves to that single product.

Common Pitfalls:
Candidates sometimes confuse deposit products with loan products because both appear on bank brochures. Another pitfall is to list only consumer loans and forget working capital facilities like overdrafts and cash credit that are crucial for businesses. It is useful to mentally group loan products by purpose: housing, vehicle, personal consumption, education and business needs. Recognizing this variety helps in selecting comprehensive options like option A in multiple choice questions.

Final Answer:
The main types of loans commonly offered by banks include term loans, overdrafts, cash credit limits, housing loans, personal loans and vehicle or car loans, as summarized in option A.