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What are the Types of Personal Loans?

Highlights

  • Know about different types of Personal Loans in India that can fulfill your various needs.
  • Some of them are Marriage Loan, Travel Loan, Pre-approved personal Loan, Balance Transfer facility, etc.

A personal loan is one of the most convenient options to raise funds to meet different needs. The best thing about a personal loan is that the customers can get the required funds quickly. Lenders provide personal loans to customers without demanding any security or collateral against the loan amount. Different types of personal loans are available according to the different types of customers needs.

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Different types of personal loans help customers meet their respective fund requirements. Be it funding your child’s marriage or getting your child a higher education or renovating your house or buying a consumer durable – there is always an exclusive personal loan option for you. Some of the prominent types of personal loans are Wedding Loan, Holiday or Vacation Loan, Consumer Durable Loan, Medical Emergency Loan, Top-up Personal Loan, Pre-approved Personal Loan, Personal Loan Balance Transfer Facility, etc. If you want to know about the different types of personal loans in detail, you’ve come to the right place to do so. We will cover it here. Keep reading!

Different Types of Personal Loans that You Should Know

Several public & private sector banks and Non-Banking Financial Companies (NBFCs) provide personal loans at affordable interest rates. Quick disbursal, Minimal Documentation and Collateral-Free are some of the benefits that customers enjoy with different types of personal loans. We are showing important details about these personal loans. Please have a look. Let’s start with a Wedding Loan.

Personal Loan for Wedding

In a country like India, weddings are supposed to be a grand and once-in-a-lifetime event. People don’t want to leave any stone unturned when it comes to their child’s marriage. But marriage comes with extra spending on things like – Catering, Jewellery Purchase, Venue Booking, Guest Accommodation, Apparel Shopping, Consumer Durable purchases, etc. A Wedding Loan could be the perfect choice for people who are facing some difficulty in arranging the money and require urgent cash to ensure this event successfully.

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With minimal documentation and no security, lenders provide Wedding Loans to customers at affordable interest rates. Both Loan Amount and Interest Rates may vary from one lender to another. For example, with the help of ICICI Wedding Loan, customers can avail loan amount upto INR 20 lakh. Wedding Loan is one of the popular types among different types of personal loans as we Indians are obsessed with grand marriages. When going for a Wedding Loan, choose the loan amount and interest rate carefully. Opt for the loan amount that you need; neither too little nor too high. You don’t want to end up getting short of funds for marriage or repaying the unnecessary loan amount later on. Lower interest rates will help reduce the EMI amount.

Personal Loan for Home Renovation

Home is something which is close to people’s hearts and that’s why people like to keep renovating it over time. When we talk about Home Renovation, it includes spending on things like home decor, interior designing, Paintwork, Buying New Furniture, Carpentry work, etc. People who like to renovate their home but find themselves short of funds can go for the Home Renovation personal loan. Several lenders provide the required loan amount for home renovation at affordable interest rates and with minimal formalities.

Among the different types of personal loans, Home Renovation type is quite popular among the customers. The reason being the quick disbursal, easy application process, and customers don’t need to provide any security against the higher loan amount. For example, with the help of Kotak Mahindra Personal loan for Home Renovation, customers can opt for loan amounts ranging from INR 50,000 to as high as INR 20 lakh. Customers can use this loan amount for different renovation related expenses whether it’s some small additions to your kitchen or any urgent repair. Customers will only need to fulfill the personal loan eligibility criteria that may vary from one lender to another.

Travel Loan

Travel Loan or commonly known as Holiday Loan is also one of the popular personal loan types. If you have been delaying your long-awaited travel trip due to a lack of money, a personal loan for travel could be a suitable choice for you. From funding your flight/train/hotel tickets to letting you enjoy outdoor activities over there, a travel loan can be the best companion for you to meet all the travel expenses. Just provide a few basic documents, meet the eligibility criteria, and the loan amount will be disbursed into your account instantly.

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Quick loan processing and the fastest loan disbursal are some of the prominent features of a travel loan. While looking for a Travel loan, choose the interest rates according to your income and repayment capacity so that you can pay the EMI amount easily. Compare all the lenders carefully and choose the best option for you.

Consumer Durable Personal Loan

Apart from Weddings, Travel, and other purposes, lenders also provide personal loans to buy consumer durables. Some lenders provide the No Cost EMI on their Consumer Durable Loan which means that customers don’t need to pay any interest on the amount. Just pay the total amount within a fixed tenure with the help of monthly installments. Customers will need to pay a certain processing fee for this personal loan that varies from one lender to another. You can purchase any consumer durable such as Mobile, TV, Fridge, Washing Machines, Microwave, Furniture, etc.

Top-Up Personal Loan

What to do if you already have an existing personal loan and need urgently? Well, in such cases, you can opt for a Top-up personal loan without any trouble. Lenders provide the extra loan amount over and above the previous loan amount and you will be paying a consolidated EMI for both of the loan amounts. If you do not want this, you have the freedom to choose separate EMIs for two personal loans. One thing you need to remember while choosing a Top-up personal loan is that your monthly income should suffice the EMI amount you are choosing.

Missing your repayment can hurt your credit score badly, so if your income isn’t sufficient to pay the EMI of a top-up personal loan, you shouldn’t go for it. The best thing about a Top-up personal loan is you don’t need to present any new documents which make the overall process quicker than before.

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Personal Loan Balance Transfer Facility

If you are struggling with high-interest rates on your personal loan and looking to opt for lower rates, a personal loan balance transfer facility could be the best option for you. This is one of the useful types of personal loans that can help customers reduce their EMI amount and interest outgo. So what does it exactly do? With this personal loan type, you can transfer your existing outstanding personal loan balance to another lender at lower interest rates. Lenders charge a certain processing fee for this facility, which will depend on the principal outstanding balance.

When customers opt for the lower interest rates, the EMI amount will automatically become lower than before and your interest outgo will also be reduced. There are a few things that you need to remember. First, you must be paying EMIs of your personal loan without any fail. Second, your credit score must be good which is considered to be 700 or above among lenders. Lenders check both these things and then decide if you are eligible for a personal loan balance transfer facility or not.

Pre-approved Personal Loan

Several lenders provide pre-approved personal loans to existing customers. The reason: customers don’t need to provide any documents. As you can see it from the name, this personal loan is pre-approved so customers cannot apply for it. Lenders usually provide this personal loan to customers with an exceptional Savings Account, Salary Account Holder and against the credit card repayment track. The final loan amount will be decided by the lender.

In the case of a personal loan against a credit card, the loan amount can be within or beyond your credit limit basis your repayment behavior. The interest rates on this type of loan tend to change from one lender to another. So, you need to choose the interest rates wisely as it will affect your repayment amount. Some lenders also provide short-term personal loans against the cash withdrawal limit of your credit limit.

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  • Personal Loan Interest Rates October 2020
    Fullerton India14.00% - 33.00%
    HDFC Bank10.75% - 21.45%
    ICICI Bank10.75% - 18.49%
    IndusInd Bank11.25%
    Kotak Bank10.99% - 20.99%
    RBL17.50% - 24.00%
    Standard Chartered Bank11.00% - 15.00%
    Tata Capital10.99% - 18.00%