Types of Personal loans: A Detailed Guide
Personal loans also known as unsecured loans are advanced by keeping in mind your credit history and ability to re-pay the same from your personal income. Sometimes, these types of loans also are also referred to as consumer loans. It is also known as a multi-purpose loan which you can borrow to meet your immediate requirements. Do you wish to repair your house? Or need some urgent funds for your wedding? If these are your needs, then a personal loan is a reliable option on which you can trust. Note that the interest rates on these loans are usually higher than home or car loan.
What are the various types of personal loans that can be availed?
Being a multi-purpose loan, there is no fixed time to apply for a personal loan. One of the main traits of this loan lies in the fact that they can be used in any requirement. Here is the list of some types of personal loan.
- Financing academics
Personal loans help you to pursue financial courses without the added burden of exorbitant interest rates.
- Expansion of business
It is quite normal for you to expand your business with the passage of time and market demands. A personal loan is an ideal way to make your business flourish.
- Finance weddings
Weddings are usually cost-effective affairs. Many a times, you cannot keep things in budgetary control. A personal loan helps you to address various aspects of a wedding.
- Medical Emergencies
Personal loans help you to address various types of healthcare emergencies
- Vacation financing
You can now realize your dreams of traveling to exotic places with a personal loan
- Refinancing other loans
Personal loans can be used to repay other forms of loans
- To repair a car
Car repairing is usually expensive. You can address the car repairing needs with the help of a personal loan
In case of your immediate needs, these loans can be your savior. Moreover, the loan approval time is quick and hassle-free. Also, there is no extra need of any documents.
Some of the overwhelming benefits of opting for personal loans
An increasing number of consumers are opting for personal loans for facilitating various kinds of purchases. With the assistance of personal loans, an individual can meet the shortfall they experience in buying a house or a car. Here is the list of some of the overwhelming benefits of personal loans.
- No security or collateral is needed
It is an unsecured loan. And this is the reason that there is no collateral of any asset needed. It is offered on the basis of your credit history.
- Easy EMI facility is available
These loans offer easy EMI facilities which make the idea of loan simpler. They help you repay the principal amount over the tenure
Provides you with more options
A nominal amount of money is added to the amount loaned, termed as interest. However, the interest rate can vary from bank to bank. This is why it is advised for you to check out every option available and select the one that fits your requirements aptly. This will not only help you pay back the loan quicker but also ensure that you do not have to pay a greater sum of money.
Be thorough with the terms and conditions
This is an essential step and can help you make the right choice. You should be sure that you understand all the terms and conditions mentioned in the loan documentation before finalizing the deal. This will not only help you clarify all the doubts but also help you understand the pros and cons of availing a loan.
Total expense
This is one of the most important considerations when it comes to availing a personal loan. There are several factors that can bring changes to the scheme chosen. For instance, documentation charges, processing fee, pre-payment charges, penalties in the case of a default, and so on. All these charges factor in and can have an effect on the final payable amount. This makes it very important for the borrower to assess how much they would finally have to spend to pay the loan off. Click here to know more about the considerations before opting for these loans.
There are many reasons why people avail personal loans from banks and other similar financial institutions. However, the main objective is to gather a lump sum amount of money in the quickest time possible.