Loans

Personal loan – Introduction, Types and Benefits

Personal loan - Introduction, Types and Benefits

A personal loan is a kind of unsecured loan which bank offers you on your creditworthiness, no security documents are asked to submit on the borrowed amount. Interest rates on personal loans are usually higher as compare to a home loan or other loans. Interest rates depend on your credit history, income and tenure. Banks can offers you amount from Rs.50,000 to Rs.15 lakh that usually depends on your income and credit history. You can use the funds for your personal requirements.

Types of personal loans

Travel loan – Travel loans are designed for travel lover if you love to travel and explore the world than travel lone is the right choice for you. You can use borrowed funds to finance all your travel expenses such as flight ticket, accommodation, food expenses and shopping etc. Travel loans usually come with travel insurance so you can enjoy your trip with a relax mind.

Home renovation loan – You always heard of home loan which used to purchase new home or land but home renovation loan is designed to renovate your old home. With times home loses its shine and beauty but it is often seen peoples don’t renovate homes because of high repair cost or most of times peoples don’t have enough money to completely repair old home because repairing and renovation required lakhs of rupees. The home loan provides you funds so you can refurbish and renovate your home.

Wedding loan – Wedding times comes once in a lifetime and you want to enjoy its maximum but the wedding is a costly affair which requires a lot of money. The wedding has a lot of rituals to perform and a lot of shopping required for yourself and your loved ones but many times its seen peoples don’t have enough cash in their bank accounts to finance all these expenses, a wedding loan can help to finance all those expenses. You can borrow a wedding loan and enjoy joyful times of your wedding and you can pay back the loan with easy monthly instalments.

Higher education loan – Higher education loan is a kind of personal loans which help you finance other expenses rather than university fees. These expenses can be accommodation, tuition fees, buying a laptop or other gadgets for study or any other personal expense.

Medical loan – In case of urgent medical expenditure you need money for medical purpose and you don’t have health insurance in this scenario you can borrow medical loan urgently to fulfil your financial requirements. A medical loan can be a great help at a difficult time.

Debt consolidation loans – Debt consolidation loan allows you to consolidate your multiple debts into a single one so you can manage your instalment payments in a better way.

Benefits of personal loan

No restrictions on usage of the fund – Common loans like home loans or automobile loans, which are borrowed for a specific purpose but funds you get from personal loans have no restrictions on its usage and you can use these funds for any of your personal purposes such as buying new furniture, buying your desired gadgets, shopping, expanding your business or anything which you want. Funds from personal loans are not allowed to use for any illegal purpose and unlawful activity.

No security needed – This is one of the most valuable features of personal loan that you don’t have to provide any security proof such as property papers and documents of other assets to get a personal loan. Banks can provide you with a personal loan on your credit history and creditworthiness. In traditional loans, you have to submit security for example in other loans you have to submit your property documents to get loan, just in case you failed to pay loan there is risk of losing the property.

Quick disbursal – You meet bank’s criteria and you have a good credit score then you can get a personal loan quickly, with the good credit score you can get a personal loan just within a few days.

Flexible tenure – You have the choice to choose the tenure of personal loan, usually, tenure goes up to 7 years so you have the choice to select tenure as per your comfort. Longer tenure means lower EMI and smaller tenure means higher EMI.

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