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
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.
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.
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.
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.
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!