The 11 Ultimate Personal Loan Types You MUST Know About in India in 2024
Personal loans are unsecured forms of lending where the lender extends funds based on your creditworthiness.
However, it’s important to note that personal loans often come with higher interest rates compared to other loan types, such as home or student loans.
This elevated interest is due to the increased risk for lenders. But did you know that there’s a multitude of personal loan options available in India?
If not, this article provides an in-depth exploration of each variety of personal loan offered in the country.
Exploring 11 Types of Personal Loans
Here’s a comprehensive list of the diverse personal loan options in India:
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Marriage Loan
Marriage loans are unsecured loans designed for a specific purpose. Weddings can be expensive, and securing funds for one can be challenging.
A loan can facilitate this process, especially if you have a strong credit score, which can help you obtain a lower interest rate.
To reduce the amount you need to borrow, consider altering your plans or saving as much as possible, and only take on a minimal amount of debt.
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Travel Loan
Travel loans are tailored for vacationers, allowing you to travel globally and settle the bills later. They often include travel insurance for comprehensive coverage.
The documentation process is straightforward and swift, with loan amounts reaching up to Rs. 40 lakh. Loan repayment terms are flexible and extendable up to 72 months.
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Medical Loan
Medical loans provide financial support for unexpected medical expenses. They can cover hospital fees, prescription costs, surgeries, chemotherapy, radiation therapy, and similar medical treatments.
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Education Loan
Education loans are designed to cover post-secondary or higher education expenses, including tuition, books, supplies, and daily living costs.
Payments are typically deferred while you’re in school and, depending on the lender, may be further deferred for six months after graduation.
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Home Renovation Loan
A home improvement loan is a versatile personal loan that you can utilize for renovating and repairing your home.
It covers both interior and exterior improvements, such as painting, tiling, plumbing, and more.
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Small Cash Loan
Small cash loans are unsecured short-term loans, ideal for meeting urgent needs. They’re easily accessible online, and some institutions extend them only to salaried employees.
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Top-Up Loan
Top-up loans are additional personal loans provided by banks on top of your existing loans. These loans are granted based on your repayment capacity and credit history. In certain situations, lenders may waive the service fee.
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Used Car Loan
Used car loans make purchasing a quality pre-owned vehicle feasible. They often come with low-interest rates and repayment terms of up to seven years, and some lenders even offer loans covering 100% of the car’s value.
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Two-Wheeler Loan
This loan enables you to buy a motorcycle or scooter and repay it in equal monthly installments (EMIs).
Repayments include both principal and interest, and once you’ve settled the loan, you can have the hypothecation on your vehicle removed.
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Computer/Mobile Phone Loan
In our increasingly digital world, these loans cater to consumers looking to finance computers or mobile devices.
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Consumer Durable Loan
Consumer durable loans offer financing for household appliances and electronics. Lenders consider your annual income and credit history, with close attention to your repayment history and CIBIL Score due to the unsecured nature of these loans.
In Conclusion
Personal loans can provide vital financial support for various needs. However, borrowing should be done judiciously.
Only borrow what you truly need, and aim to repay the debt as soon as possible to minimize interest costs.
Frequently Asked Questions
Q: What is the interest rate on a personal loan?
A: Interest rates for personal loans typically start at 9.9% p.a. for up to six years, with loan amounts reaching up to Rs. 20 lakh.
Q: Can I close the loan ahead of time?
A: Yes, customers can apply for loans through the app, which offers flexible loan and EMI options, as well as no pre-closure fees for early repayment.
Q: How can I check the status of a personal loan?
A: You can track your loan status online using your net banking login ID and loan account number. Alternatively, you can visit a bank branch in person or call the lender’s office.
Q: Could my personal loan application be denied?
A: Personal loans are generally straightforward to obtain, but your application may be denied if you don’t meet the lender’s eligibility criteria.
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