Personal loans help you to cope with any financial emergency without any hassle. But if you want to lower your tension with the repayment, you must explore all the available options. Before opting for the loan you must have clear thought about the reason behind it. The article covers all seven of them.
Types Of Personal Loans Available in India
Personal loans are the most convenient option when you need funds immediately. You must be aware of the typical no-security fixed-rate personal loan. However, there are six more options available in the domain. You must know about all of them to opt for the best alternative. Here are the seven types of personal loan you can explore. Basically all personal loan types are for different uses. Borrowers can choose a personal loan as per their requirements.
7 Types Of Personal Loan:
#1 Holiday
Holidays are a fun time where you meet your friends and family. Where it relaxes your mind, it can also stress your finances. It is due to all the expenses related to festivities, gifts, travel, etc. The first solution is to save for all these activities. But if you weren’t able to save for any reason, you can opt for a holiday loan. The only thing you need to remember is to borrow only the required amount. Otherwise, the repayment can again create a problem.
#2 Medical
Medical emergencies can arrive at any point in time. What makes it worse is that you need a significant amount of money to get proper treatment and medical facilities. That is why you should always keep medical funds separate. But if due to some reason your saved amount falls short than what you need, the best option is a personal medical loan. It allows you to cover additional expenses while opting for a better scheme. The benefit here is that you can easily get lower interest rates on this. You can check the personal loan interest calculator to see the difference.
#3 Credit Builder
The name itself tells you the purpose of this loan, i.e., it helps you in building up your credit. This is advantageous when you are new to finances, and you want to create a credit history. You can also opt for this to mend a spoilt credit history. You can make timely repayments and improve your overall credit record. The disadvantage here is that you can’t opt for higher amounts. Plus, the amount isn’t available for immediate use. It is just for credit building.
#4 Home Improvement
It is always a great idea to refurbish your house to maintain its quality or upgrade your lifestyle. But you may find that the cost associated with this renovation is quite high. If you can’t manage it with your income and don’t want to touch your savings, a home improvement loan is the best solution. You just need to have a good credit history to get this approved. There is no need for collateral.
#5 Debt Consolidation
There is a lot of hassle in handling multiple debts at the same time. If you are stuck in a similar situation, you can opt for a debt consolidation loan. This helps you in converging all the loans into one. A few benefits you can obtain by this are:
- All the worries of making multiple payments every month get reduced
- The overall interest rate may get lower
- You can opt for a different feature of loan, such as fixed-rate from variable one
- You can alter the tenure of the loan
It depends on the lender whether they directly pay for your previous debts or handover the money to you. You can also check out a personal loan interest calculator to see the difference in your current interest and the one you can receive.
#6 Wedding
Whether it is your own wedding or your children’s, there is a considerable amount to pay for everything. In case your savings or income can’t handle it, you can apply for a wedding loan. It will help you in getting all the expenses covered without much stress on your pockets. Therefore, you can have the wedding of your dreams without any hassle.
#7 Vacation
Just like holiday loans, there are vacation loans. Whether it is a family vacation or your honeymoon, you don’t need to wait forever to visit your dream locations. You can simply opt for a vacation loan and get going. The interest rates are typically higher in these types of personal loans. It is because you are taking them just for fun purposes.
Hence, these are the personal loans available in India for the borrowers for different uses. You can apply for any of these personal loans based on your motive behind borrowing funds. But be clear about the purpose of availing the loan thus, you can’t get a burden on your pocket.