You need money to fulfill the necessities of life. But once the needs are met, it’s human nature to aspire for better & higher things. But your income may not always keep pace with your desires.
Life is full of surprises. You may also face a situation where you need money urgently. It can be a medical emergency, a family function, or even unexpected damage to your property in a natural calamity. The need for money arises when you are least prepared for it. You then need to apply for an instant loan.
In the olden days, people often approached a money lender to borrow funds for their requirements. But now you have banks & financial institutions to bridge that gap. You need not depend on family & friends. Today you have personal loans as your savior.
What is a Personal Loan?
A personal loan is borrowed from banks or financial institutions to meet personal expenses like shopping, travel, home/vehicle repairs, etc. Banks lend money after assessing your creditworthiness and do not ask for any security, i.e. personal loans are unsecured borrowings. So banks charge a relatively higher rate of interest on personal loans (12-24% p.a.)
Types of Personal Loans
There can be many reasons behind your sudden need for money. Accordingly, different types of personal loans are available to provide you with liquid cash in that hour of need. The major types of personal loans in India are:
1) Marriage Loan
Marriage is one of the most critical events in your life. You want to leave no stone unturned to make it memorable for you and your loved ones. An extravagant wedding at a dream destination gifts you those memories but is heavy on your pocket too.
If you are short on cash, you can avail of a wedding loan. Apply for a personal loan to make your dream come true.
- You can borrow as little as Rs.10,000 and as high as Rs.40 Lakh.
- Loan tenor ranges from 3 months to 6 years
- The groom, bride, or any of their family members can apply subject to meeting the eligibility criteria
2) Holiday/Vacation Loan
Who does not love traveling to exotic locales? Travel is also a great stress buster after long days at work. But traveling worldwide is quite expensive, and financing your holiday should not add more stress to you. So travel loans come in handy to let you enjoy first and pay in easy installments later.
- Loan amount up to Rs.40 Lakh repayable over 6 years
- Instant personal loan disbursal with minimal documentation
- Travel insurance is given as an additional benefit with travel loans
3) Medical Loan
A medical emergency can be devastating for the patient and his family. Not all have the benefit of mediclaim; even if they have, it may be inadequate. The only recourse is to avail of a medical loan to meet the expenses of hospitalization, surgery & medicines.
- Loans available up to Rs.25 Lakh repayable over 3-6 years
- Instant loan approval with minimum paperwork
- Some lenders also offer a flexible EMI plan
4) Education Loan
Generally, education loans are secured and granted against a guarantee or any collateral. But an education loan (unsecured) is a special type of personal loan to meet tuition or hostel fees or any course-related expenses.
- Loans up to Rs.5 Lakh are generally granted without collateral
- Most suitable for pursuing short-term courses for up-skilling
- For regular & professional studies, secured education loans can be availed
5) Festival Loan
Festivals are a big part of Indian culture. Shopping and celebrations are part of festivals. However, cash is needed for the celebration. If you run short of money during festival time, you can quickly get a festival loan to complete your celebrations.
- Festival loans are low tickets in the range of Rs.50,000-1 Lakh
- Loans are given for the purchase of household articles & gadgets
6) House Renovation Loan
You can get a home loan to buy a new home. But if your existing house needs a makeover or repairs, you can avail of the home renovation loan. You can spruce up the home by painting, roofing, changing the tiles, or giving a new design.
- Renovation not only beautifies the home but also increases its market value
- Banks extend special benefits to their existing customers
7) Consumer Durables Loan
This loan is helpful for you to purchase household appliances like TV, refrigerators, AC, Washing machines, etc. Loans up to Rs.5 Lakh can be availed easily. You can apply for instant personal loans to buy the latest gadgets.
8) Pension Loan
This loan is only extended to retired individuals who draw a monthly pension. It is extremely helpful for senior citizens who urgently need money.
- The loan amount can be up to 8-10 times the latest monthly pension with a repayment tenor of up to 6 years
- Interest rates on pension loans are generally lower than that of regular personal loans
9) Agricultural Loan
Agricultural loans are meant for farmers engaged in agriculture & allied activities. They generally have lower interest rates and flexible repayment terms to support farmers and their special needs.
10) Top-up Loan
A top-up loan is an additional amount you can borrow over & above an existing personal loan. For instance, you can avail of a personal loan at much lower rates (12-15% p.a.) to pay off your credit card dues that attract very high rates (42-45%) & penalties. It also helps you to consolidate your borrowings under a single head.
As you move up the income ladder, it’s less about life and more about lifestyle. With rising aspirations, people do not want to compromise on their desires & interests. Personal loans make that lavish wedding, aesthetic home, and exotic vacation happen even if you lack the resources today. But they can also be your lifeguard in the moment of crisis & distress.