Different Types of Personal Loans in India

A personal loan is one type of credit-based product that can be used to support different financial purposes. The past year has seen tremendous growth in personal loans due to the financial crisis that many have been facing due to the Covid19 lockdown. Financial companies in India have created different types of loans to suit different financial needs.

What is a Personal Loan?

A Personal Loan is an unsecured funding option you may borrow from a financial institution without any security, collateral, or guarantor. You may use different types of Personal Loans to cover various expenses, including the costs related to weddings, home renovations, education, vacations, medical emergencies, etc. Like any other loan, you must repay it to the lender with interest within a pre-determined repayment tenure.
Read Also: 8 Different Types of Loans You Should Know

Different Types of Personal Loans in India

Financial companies in India have created different types of loans to suit different financial needs:

Wedding Loan

A wedding is an extravagant affair that involves multiple expenses. Pre-wedding, during the wedding and post-wedding expenditure everything can be taken care of through personal loans. Any last-minute expense can also be managed through wedding loans.

Home Renovation Loan

Urgent home repairs and renovation work incur a considerable amount of expense. These can be covered with a personal loan for home renovation. Refurbish your home with easy personal loans and do not ignore areas that require urgent fixing.

Education Loan

A lot of savings is required for higher education or studying in a foreign university. Taking an education loan will ease off the burden and help you with the desired loan amount to complete your academic levels.

Festival Loan

This is a new add on to the personal loan variety. Major festivals like Diwali, Christmas, new year etc. involve celebration and gifting expenses. If your salary is delayed during the festival or the guest list is long, you can always turn to a festival loan for financial support.

Medical Emergency Loan

This is one situation where urgent cash is required. A medical emergency is unavoidable, and finance must be arranged in a stipulated time. Instead of relying on a relative or a friend, raise the funds independently through the medical emergency loan. Whether it is an expensive medication, major surgery, or hospitalisation expense, these can be managed through medical emergency loans.

Consumer Durable Loan

There are many latest electronic gadgets and appliances available in stores and online platforms. These are expensive products that can be bought on EMIs via consumer durable loans. DSLR camera, Apple iPhone, smartwatch, kitchen chimney, food processor etc.
Read Also: The Different Types of Business Loans for Women Entrepreneurs

Benefits of Personal Loan

Benefits of different kinds of Personal Loans include the following:

• Ample loan amount

• Competitive interest rates

• Flexible repayment terms

• No collateral requirement

• No end-use restrictions

• 100% digital loan procedure

Eligibility Criteria for Personal Loans in India

Wondering if you qualify for a Personal Loan in India? These are the standard personal loan eligibility conditions to fulfil for different Personal Loans:

• Age: 21 to 58 years of age

• Indian citizenship

• Salaried employee with at least six months of experience in the same job or self-employed professional with at least two years of experience in the industry

• Monthly income of at least ₹ 15,000

Documents Required for Personal Loans in India

Eligible candidates must provide these documents to apply for different types of Personal Loans in India:

• Duly filled application form

• Coloured passport-sized photograph

• Identity proof: driving licence, passport, PAN card, Aadhaar card

• Address proof: driving license, passport, Aadhaar card, ration card, utility bill

• For self-employed professionals:

• Office address proof, like maintenance bills, utility bills, property documents, or rent agreements

• Income proof, like the last six months' salary slips, the previous six months' salary account statement, Form 16 for salaried employees

• Job continuity proof, like an appointment letter from the current employer or an experience certificate from the previous employer.

• For salaried employees:

• Residence ownership proof, like maintenance bills, electricity bills, or property documents

• Business existence proof, like shop establishment proof, a copy of tax registration, or a company registration certificate

• Income proof, like the last six months' bank statements and ITR for the previous two consecutive years

Read Also: A Step-by-step Guide to Getting Unsecured Personal Loans

Process to Apply for Personal Loan in India

Follow these steps to apply for various Personal Loan types in India:

• Visit the lender’s website or download their loan app.

• Fill out an online application form with your personal, financial, professional, and bank details.

• Scan and upload the necessary documents to complete the application procedure.

• Let the verification process complete.

• Review and accept the loan offer to begin the disbursal process.

Conclusion

HeroFinCorp is an instant personal loan app a financial giant in India. It is a secured loan app available for download only on the Google Play store. In few simple steps, loan approval and disbursal are done using a smartphone. Salaried and self-employed borrowers between the age group of 21 to 58 years can apply for a personal loan at HeroFinCorp.

Frequently Asked Questions

1. What are the two main types of loans?

The two different types of Personal Loans are secured and unsecured.

2. What are the categories of Personal Loans?

We can categorise different Personal Loans into Personal Loans for weddings, education, vacations, home renovations, medical emergencies, etc.

3. Which personal loan is low interest?

Out of different kinds of Personal Loans, secured loans have lower interest rates due to the lower risk involved for the lender.

4. What is the risk of a personal loan?

High-interest rates, strict eligibility conditions, and missed EMIs are the major risks of Personal Loans.

5. How to calculate loan interest?

Checking the credit score, DTI ratio, and lender’s rates are the best ways to calculate loan interest for different types of Personal Loans.