You should be Aware of these Personal Loan Types
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12 AUGUST, 2021
Loans are when you take money from a bank or NBFC and agree to repay the same in a predetermined amount of time frame with an additional rate of interest on the same. These loans are majorly bifurcated into two major categories — Business loans and Personal loans.
Personal loans are the loans that are taken for individual or personal benefits. These personal reasons may include marriage, foreign trips, or loans taken for other occasions, such as a home renovation or purchasing a major piece of equipment or asset like a laptop or furniture. The minimum range of personal loans starts at Rs 50,000 and may go up to Rs 10 or 15 lakh.
Pros and Cons of Personal Loans
Personal loans are solely based on your past financial history and thus are easy to avail with minimum documentation. Personal loans are also mostly collateral-free. This means there is no requirement to pledge something against the same. They can also be repaid easily in reasonable installments.
Types of Personal Loans
So what exactly comes under personal loans, let's have a look.
Marriage is a one-time affair. Some people like it to be the wedding of their dreams. Such individuals wouldn't mind taking an online personal loan to fulfill that dream. Some may even apply for a personal loan to enjoy an expensive honeymoon after getting married.
Travelling around the globe can be expensive for an individual. And if it is a family trip, the risks amplify. So, it is wise to avail of a travel loan. Some travel companies also offer instant personal loans online for travel. Some others may provide easy installment packages for destination trips.
Maintaining a home involves huge expenses, such as extensive home repairs, upgrading your home appliances, etc. Applying for a personal loan can help in such circumstances.
Personal emergencies of a medical nature may often be unexpected. Such situations leave most individuals in dire need of money on an urgent basis. Applying for an instant personal loan online is helpful; most banks disburse the loan amount on the same day itself.
Individuals can apply for personal loans to fulfill myriads of needs. For senior citizens, it may help take care of medical expenses. For others, a personal loan may come in handy in case of their ineligibility for education or business loans.
An individual may also avail a personal loan to repay a debt or invest in something. In such cases, even with its increased rate of interest, a personal loan is actually a good option.
Final Words
Banks such as Kotak Mahindra offer low interest rate and easy effective loan process for personal loans but understand that personal loans cannot be specified against a particular task. But one should not mistake personal loans for luxuries. They are beneficial financial tools to meet personal expenses in emergencies. So avail them and benefit from them wisely.
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