Personal loan is one of the quickest and most convenient loans to avail in order to raise funds for a medical emergency, making an expensive purchase, getting married, consolidating your debts, renovating your home, etc. Easy application process, quick approval and minimum documentation are just a few of the many reasons that make it a preferred loan option. But many of us are unaware of the fact that there are many types of personal loans offered in India. Let’s have a look:
- Short Term Personal Loan (STPL): Offered by many digital lenders, a short term personal loan starts from as low as Rs. 1000 and can be repaid within a few days to months to the lender. This type of personal loan is disbursed to your account within a few hours and requires almost no formality
- Wedding loan: This loan aims to help couples and families deal with the pressure of wedding finances. It can be used to fund major wedding expenses like venue, accommodation for guests, jewellery, catering, decoration, etc. The interest rates for these loans are usually higher during the peak wedding season as compared to the off season
- Top- up loan: This loan is offered by the same lender from which you have already taken a personal loan. With a top- up loan, you can avail more funds on your existing loan and can repay them within your existing tenure. However, this type of loan is only offered by the lender if you have been regular with your repayment
- Vacation loan: If you are planning a vacation and wish to take care of your travel bills without draining your savings or affecting your monthly budget, this is the kind of loan you should go for. While credit cards can also do the task for you, a holiday loan can make the funds readily available for your travel plans and that too at a lower interest rate
- Agricultural loan: This type of personal loan is offered to farmers and helps them to buy various equipment and other tools and raw material related to their farming activities. The interest rate for this loan is very low and encourages farmers to earn more by improving their productivity
- Home renovation loan: Time is changing and so should your home and lifestyle. As the name suggests, this loan can help you finance your home’s repair and renovation. So, if you had been planning of repairing that leaky ceiling or wanted to get wooden flooring done, this loan can help you without denting your savings
- Overdraft loan: No one can predict what happens tomorrow but you have to be prepared for the worst, right? This loan ensures that you never run out of money and have a sufficient amount in your account if there is an emergency. The interest rate of this loan is higher and you only pay interest on the money you use
- Consumer durable loan: Banks also offer consumer durable loan at no cost EMI. This type of loan can be used to purchase any consumer durable item including a phone, refrigerator, furniture, washing machine, microwave, etc. The amount of the product gets divided into EMIs and can be repaid within the tenure decide. Some of the products may involve a down- payment or a processing fee while others may not
- Medical loan: If there is a medical emergency and you don’t have enough funds to pay the medical bills, you can apply for a medical loan and can avail instant funds to pay those heavy bills
- Pension loan: Yes, pensioners can borrow at least 7 to 10 times of their pension as loans to deal with any financial emergency. Usually, this loan can only be availed from the same bank from which the pensioner is drawing his pension
- Higher education: A personal loan for higher education can cover all your expenses like college fee, books, accommodation, tuition fee, travel, etc. Students can apply for this type of personal loan with a co- applicant (guardian/parents)
- Festival loan: This type of personal loan comes occasionally during the festival season. This loan has a low borrowing limit, however, it usually comes with lower interest rate and the processing fee charged is also less. There may also be some other attractive offers available on this type of loan
While there are various personal loan options available with many banks, some lenders might not provide different types of personal loans and offer them all under a single ‘personal loan’ category.
You can actually apply for a different personal loan as per your personal requirement. You can compare personal loan offers by various banks along with the interest rates and Paisabazaar and can select the most suitable offer within a few minutes.