A personal loan is a broad term to describe any type of unsecured loan that you can use to pay for your expenses and debts. There are several different types of personal loans available in the market today. In this article, let us discuss in complete detail.
What is a Personal Loan?
A personal loan is a type of unsecured loan that is offered by financial institutions, such as banks and credit unions, to individuals for a variety of purposes. You can use personal loans can be used to pay for a wide range of expenses, including your home renovations, your medical bills, for your debt consolidation, car repairs, and more. These loans typically have fixed interest rates and fixed monthly payments. You will not have to deposit any collateral like a mortgage or a car loan does. Personal loans are also easier for you to obtain. However, they may have higher interest rates than secured loans, as the lender is taking on more risk by lending to an individual without any collateral.
Different Types of Personal Loan
Given below are the different types of personal loans that are available in India:
- Wedding loan
- Home renovation loan
- Travel loan
- Medical loan
- Debt consolidation loan
- Higher educational loan
- Small personal loan
- Used car loan
Wedding loan
This type of personal loan is specifically designed to help you finance the expenses of a wedding. You can use it to cover the cost of the venue, catering, attire, and other wedding-related expenses. Also, wedding loans are one of the most popular types of personal loans in India.
Home renovation loan
This type of personal loan is for you to finance home improvement projects, such as remodelling a kitchen or bathroom, adding a room, or updating the exterior of the home.
Travel loan
This type of personal loan is designed to help individuals finance the costs of a vacation or travel. It can be used to cover the cost of flights, accommodations, activities, and other travel expenses.
Medical loan
A medical loan is a personal loan that you can use to pay for medical expenses. It includes hospitalization, insurance premiums and treatment costs. You can also use it to pay for surgery and other medical procedures such as dental care.
Debt consolidation loan
You can use this type of personal loan to pay off loans. Or you could consolidate multiple debts into one loan. It can make it easier to manage debts and may help to reduce monthly payments.
Higher education loan
This type of personal loan is used to finance the cost of tuition and other expenses related to higher education, such as books, housing, and transportation.
Small personal loan
As the name suggests, this type of personal loan is typically for a smaller amount of money. It can be used for a variety of purposes, such as paying off bills or making a small home improvement.
Used car loan
You can apply for this personal loan to conveniently purchase a second-hand car.
We now hope that the different types of personal loans in India are now clearer to you.
Personal Loan Eligibility Criteria
To be eligible for different types of personal loans, most lenders will require the following:
Good credit score
Lenders generally prefer to lend to borrowers with good credit scores, as they are considered to be at lower risk.
A stable income
Lenders want to see that the borrower has a steady income and is able to make regular loan payments.
Bank account
Lenders may require the borrower to have a bank account in order to make loan payments.
Proof of identity and residence
Lenders may require the borrower to provide identification, such as a driver’s license or passport, and proof of residence, such as a utility bill or mortgage statement.
In addition to these general eligibility criteria, some lenders may have additional requirements, such as a minimum credit score or minimum income level. It’s important to carefully review the lender’s requirements before applying for a personal loan.
Moreover, it is also important to carefully consider the terms and conditions of a personal loan before accepting one. Borrowers should consider the interest rate, fees, and repayment terms to ensure that they are comfortable with the loan and can afford to make the monthly payments.
FAQ’s
1. What is a personal loan, and how does it work?
A personal loan is an unsecured credit product that lets you borrow money without pledging collateral or requiring a guarantor. Airtel Finance offers personal loans from ₹10,000 to ₹9 lakh through a 100% digital process via the Airtel Thanks App. Loans are disbursed within 24 hours with flexible repayment terms of 3-60 months.
2. What are the different types of personal loans available in India?
Personal loans in India include wedding loans for celebration expenses, home renovation loans for property improvements, travel loans for vacation costs, medical loans for healthcare needs, debt consolidation loans to combine multiple debts, education loans for academic expenses, small personal loans for urgent needs, and used car loans. Airtel Finance offers a flexible personal loan that can be used for any of these purposes based on your eligibility and requirements.
3. What is a wedding loan, and how can it be used?
A wedding loan is a personal loan specifically designed to finance wedding-related expenses. It covers venue booking, catering services, wedding attire, decorations, and other celebration costs. While Airtel Finance doesn’t offer a dedicated wedding loan product, you can use their flexible personal loan for wedding purposes. Simply select the loan amount matching your wedding budget and choose a suitable repayment tenure of 3-60 months.
4. What is a home renovation loan, and what expenses does it cover?
A home renovation loan finances home improvement projects, including kitchen remodelling, bathroom upgrades, adding new rooms, exterior updates, and general modernisation work. Airtel Finance’s personal loan can be applied toward renovation needs. You can determine the required loan amount based on your renovation budget and select an appropriate repayment tenure between 3 and 60 months to manage your monthly EMI comfortably.
5. What is a travel loan, and how can it help finance vacations?
A travel loan helps finance vacation expenses, including flight bookings, hotel accommodation, holiday activities, and miscellaneous travel costs, without depleting your savings. Airtel Finance’s flexible personal loan can fund your travel plans. You can select the loan amount matching your travel budget and choose a repayment tenure of 3-60 months that aligns with your financial capacity, enabling you to enjoy your vacation immediately.
6. What is a medical loan, and what medical expenses are covered?
A medical loan finances healthcare expenses, including hospitalisation charges, insurance premiums, medical treatments, surgical procedures, and dental care costs. Airtel Finance’s personal loan can be used for medical emergencies and healthcare needs. This ensures you can access necessary medical treatment without financial constraints. Simply apply for the required amount and choose a suitable repayment tenure between 3 and 60 months based on your recovery timeline.
7. How does a debt consolidation loan work?
A debt consolidation loan combines multiple existing debts into a single loan with one monthly payment. You use the consolidation loan amount to repay all outstanding debts, then manage just one EMI instead of multiple payments. This simplifies debt management and may reduce your overall monthly burden. Airtel Finance’s personal loan can be used for debt consolidation. Calculate your total outstanding debt and apply for a matching loan amount.
Conclusion
In conclusion, these different types of personal loans provide an instant cash flow to help you meet your short-term financial needs like emergencies and unexpected expenses. It is a great way to get the financial help you need, especially if you have been denied credit elsewhere. They can also help you manage your debt and improve your credit score.
Check how much personal loan you need and then calculate the EMIs you need to pay on it, all on the personal loan EMI calculator. After that, get your personal loan from Airtel Flexi Credit right away!
