posted on 2020-06-17 10:07:28 by Admin
A personal loan is a financial product through which you can borrow money from a lending institute. Various kinds of loans are being offered by various government and private banks. These are designed so that it could be reached by all sections of society.
Personal loans play a very important role in India. People in need can avail this type of loan as per their requirements.
Personal loans can be used for multiple purposes. Moreover, different types of loans can help you to meet the financial needs accordingly.
To avail of these personal loans, one just needs to fulfill the specified eligibility criteria mentioned as per the organization. Every personal loan comes with its own specifications, terms & conditions, rate of interest, and different tenures for the repayment. Personal loans let people fulfill their dreams and shape lives in a better way by providing money at various instances of life.
Short Term Personal Loan
These are the personal loans that can be availed for a short period of time. Applicants who can repay the loan soon can apply for such kind of loans. The interest rate for short term personal loans is less and the loan amount can be repaid in a few months.
Payday Personal Loans
These personal loans are taken by employees who need money until their next salary kicks-in. These are small ticket loan with high-interest rates and needs to paid back within 60 days.
Flexi Personal Loans
In a personal Flexi loan, a lender gives you a credit limit which you can use at your convenience. Neither you need to spend the loan amount one go nor have to pay fixed EMI. Just pay interest in the amount that you will use from your kitty.
Secured Personal Loans
This type of loan is protected by an asset. Personal loans are generally unsecured but sometimes you may have to put up collateral. In situations like when you have low income or low credit score.
Generally, a secured loan is used to get a home or a car. Collateral is used as security by the lender until the time the loan is paid fully. Apart from these, several other items can also be used for security purposes such as bonds, stocks, personal property, etc.
One can borrow the largest amount of money under this loan. Its benefits include lower rates, higher borrowing limits, and longer repayment time.
Unsecured Personal Loans
This loan is the opposite of a secured personal loan. Lenders take more risk in this loan because here they don’t have any asset to recover and due to this, they generally put a little bit high-interest rates.
The rate of interest in this loan keeps varying over the loan term. In short, this loan has fluctuating interest rates. The interest rate will change as per the internal benchmark of the bank or as per the market conditions. The monthly EMI may go up or down depending upon a decrease or increase in the interest rate.
These are personal loans which comprise of fixed rate of interest. Therefore, the rate of interest and the payment remains the same all the time. This way you can easily keep a track on the monthly interest that needs to be paid.
This is a type of loan which is provided by the banks as an additional loan by the housing finance company on the existing home loan. This process requires less documentation. The maximum top-up loan availed could be Rs 50 lakhs.
Co-signed or Joint Personal Loans
This loan is taken by one who has can not avail of a loan all on his own. This is so because they do not stand creditworthy as per the norms. This loan increases the debt level. In case of any discrepancy, the co-signer will have to repay the loan.
NRI personal Loans
The first and basic eligibility is that the person applying should be an Indian and the co-applicant NRI should be a close relative. The documentation process is very simple with interest rates starting from 15.49% p.a. There is no security required to avail of this loan. The maximum loan availed could be up to 10 lakhs. Their personal loans include gold, cars, housing, property, etc.
Small Personal Loan
This loan is taken by anyone when there is an urgent need for money. This need can occur at any point in time for anything be it for business, child’s education, and medical or for additional funds.
Borrowers can use personal loans for multiple reasons. The lender will not ask you for which reason you are taking the loan. So whether it is a wedding or small business requirement, you can use such a loan for any purpose.
To Expand Small Business
This loan is offered by banks to small businesses like people who are starting a new business or who have to expand the established ones. So, you can apply for personal loans to expand your small business.
For Travelling Purpose
People who love to travel and enjoy life but don’t have sufficient money to accomplish it can opt for this type of loan to go out on holidays. This is also apt for people who don’t want to convert their savings into liquid or who don’t want to use their fixed deposits.
Marriage is one of the biggest events in everybody’s life. Hence, this loan is designed so that the finances could be managed easily and all the expenses could be managed efficiently. The general interest rate lies from 10.75%-36% and has a typical tenure of 1-5 years. A personal loan can cover all your marriage expenses.
You can take a personal loan in case of a medical emergency. This is so because treatment needs money and not every person is prepared at random or is financially okay to survive the medical expenses at once. Hence, this loan is designed as the hospital charges, the surgeries, treatments, medicines, etc are very expensive. This also has its own eligibility criteria which one needs to stand on. The interest rate lies from 11%-13%.
This loan is designed when a person needs to upgrade the existing house to a new trending design. Here, the maximum loan one can get is 90% of the market value of the property and the tenure of repayment can be up to 30 years. This also needs to stand on the eligibility criteria to get it sanctioned.
For Debt Consolidation
This is a loan that is taken to consolidate all types of existing debts. These debts could be credit cards, medical expenses, personal loans, etc. This lets one manage and pay their various installment in a better way. It also has higher interest rates.
There are so many loans available for different needs for different people be it anyone of any financial standard. Apart from the above-mentioned loans, some banks also offer other types of personal loans as well based on different other needs of the people. Few of the other loans are bridge loans, consumer durable goods, personal computer loans, etc. So, choose the loan which fits in the best as per your requirements and let go of all your financial difficulties to fulfill your dreams.
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