Types of Personal Loans

Personal loans have become highly popular in recent years as they provide instant access to funds that can help you meet your immediate financial requirements. Banks, financial institutions, and Fintech companies across the country offer personal loans at attractive interest rates and flexible repayment tenures, thereby making it easier than ever for you to procure financing.

Kinds of Personal Loans in India

Here are the most common personal loans in India:

  • Consumer Durable Loans

Given the ever-increasing need to keep up with technology and the importance of furnishing your home with modern electronic devices, consumer durable personal loans can help you equip your home with the best television, refrigerator, washing machine, microwave, computer or laptop, geyser, air conditioner, etc. These products are often expensive, especially if you want to purchase the top brands. Consumer durable personal loans allow you to have the best of the best for your home as banks and financial institutions offer loans specifically to purchase these products. The loan amounts for consumer durable loans extend from Rs.10,000 to Rs.1 lakh, and the tenure generally ranges from 12 months to 60 months, while the interest rates can be anywhere between 16% and 22%.

  • Wedding Loans

Weddings are special occasions that involve a lot of expenses. Every couple wants something magical on their big day, but magical memories come at a price. Wedding loans have been designed specifically to finance the wedding of your dreams. Since your savings alone may not be enough to meet all the wedding-related expenses, from catering to booking a venue, and everything in between, these loans can help you pay for the best designer clothes, decorations, jewellery, and all other expenses. The amount you can borrow through a wedding loan will depend on a few crucial factors such as your income, your credit score, etc. The tenure of these loans ranges from one year to five years, and the interest rate is usually between 10% and 20%.

  • Festival Loans

Festivals are quite common in India. There is something or the other going on every other day, and each occasion is as special and important to people as the next. To celebrate a festival in the best way possible, you will need funds to buy a variety of festival goods. For instance, during Diwali or Christmas or Eid, people usually purchase household items, expensive gifts, and clothes which can cost quite a bit. If you haven’t saved for a festival, you need not worry as festival loans can come to your rescue and ensure that you have a celebration to remember. The tenure of festival loans is usually short – up to a year, and the amount you can borrow is between Rs.5,000 and Rs.50,000.

  • Travel Loans

As the popular quote goes, ‘Investment in travel is investment in yourself’. The experiences and learnings from your travels can go a long way in shaping your character and more importantly, giving you the peace of mind that is fleeting in the modern day. Travel loans provide you with the funds to explore new destinations and cultures be it locally or overseas. These loans can help you pay for your flight tickets, hotel stays, restaurant bills, and shopping. The tenure of travel loans range from one year to five years, and the interest rates applicable to them start from just 11%.

  • Home Renovation Loans

Everyone dreams of living in the perfect home, and home renovation loans can help you do just that. These loans can be taken if you own your own property or apartment and want to renovate it to reflect your own style. A personal loan for home renovation can be used to change the interiors of your home, renovate the structure of the house, addition of rooms or patios or any kind of spaces, etc. The interest rates applicable to home renovation loans can be anywhere between 9% and 11% and the tenure for these loans can be as long as 7 years.

  • Debt Consolidation Loan

Personal loans for debt consolidation are ideal for those who have multiple debts and want to get rid of them. Whether you have multiple loans or credit card dues to clear, or even a friend or relative to repay, a debt consolidation loan will help you get rid of all your existing debt. What this type of a loan essentially does is consolidate all of your debts to repay all your existing debts so you only have one loan left to repay. The interest rates offered on debt consolidation loans are usually low, starting from just 11%, and the amount you can borrow to repay all your current debts can range from Rs.50,000 to Rs.5 lakh. The repayment tenure for debt consolidation loans can extend up to five years.

Considering the various kinds of loans out there, availing finance for any kind of event or emergency has never been easier. There are hundreds of lenders that offer loans for your needs, and the interest rates, repayment tenures, processing fees, and other charges vary from bank to bank, thereby making it crucial for you to compare as many lenders as possible in order to find the loan that best suits your financial needs.

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