A personal loan can be defined as a lump sum amount that you take from your bank. A personal loan is the best way to take care of immediate requirements of funds. It won’t be wrong to say that a personal loan is one of the quickest ways to borrow money. You can use a personal loan to meet marriage expenses, going on a holiday with your family, higher education, buying consumer products, meeting medical expenses, etc.
Before your bank approves your personal loan application, the bank evaluates your creditworthiness, this means your bank will check whether you are competent enough to repay the loan. In most cases, the repayment term is usually shorter i.e. less than 5 years. So, without any further ado, let me discuss different types of personal loan.
This type of personal loan is quite popular amongst the people of both rural and urban sectors. The loan amount can be used to meet the expenses such as buying jewelry, hotel bookings, shopping, catering, etc. There are various factors on which the loan amount depends such as – security pledged by you, your repayment competence, and your age. For marriage loans, the interest rate is decided as per the prevailing market rate at the time of the disbursement of the loan.
You can take this loan to fulfill both your personal and family desires during festival season. Banks, usually, offer this type of personal loan during the festive season at cheaper or discounted rates. This is an apt loan for all those people who are looking for a small amount of loan. The minimum amount offered by the banks under Festival Loans is Rs. 5,000 and the maximum amount is Rs. 50,000.
However, if you are opting for a Festival Loan, make sure you are familiar with its term i.e. 12 months. You have to repay the loan amount through EMIs (equated monthly installments). Most importantly, the rate of interest can vary from bank to bank.
If you want to take care of your travel bills without affecting your savings or monthly budget, then make sure you have opted for a Holiday Loan. Well, credit cards are also capable of doing the task for you, but acquiring a holiday loan will help you in having funds on hand for your travel plans and that too at affordable interest rate. The loan amount for this type of personal loan will depend on two things – your creditworthiness and the travel destination.
Consumer Durable Loans
This type of personal loan is offered if you are looking to purchase a consumer durable product such as a music system, a computer, a washing machine, a television, air conditioner, and so on. This type is unlike any other type of personal loan as by offering a consumer durable loan, banks want to attract an increasing number of customers.
The minimum amount offered by the banks is Rs. 10,000 and the maximum amount offered by the bank is Rs. 1,00,000. Having said that, some banks even offer you a minimum amount of Rs. 5,000 and the maximum amount offered is Rs. 2,00,000. The maximum term for this type of loan is 5 years.
Most of the banks really take care of the old-aged people. This is the reason all those people who have retired from their respective jobs, they can avail a personal loan, this type of loan is called ‘Pension Loan’. As per this type of loan, the bank offers a maximum amount which is usually up to 7 or 10 times of the amount which was received as the last pension.