8 Reasons When You Get Personal loan quickly
In an ideal world, nobody needs a personal loan to fulfill all his needs. However, in a real world, many of us have a very few options but to borrow to materialise our dreams. Moreover, simple application process, instant approval, and minimal documentation also encourage people to approach banks or lenders. Although banks or commercial lenders will help you decide what type of personal loan is best for your financial requirements, it is good to have a general idea of different types of loans beforehand. This will help you easily comprehend what your lender is offering. Here, we have compiled a list of 8 types of personal loans you could get from a bank:
1. Wedding Loans
The dream of having a lavish wedding can be fulfilled with a wedding loan. People who can’t afford wedding expenses, including catering, hotel bookings, decorations, clothes and jewellery shopping can avail this loan. However, you should know that the interest rates on such loans are a bit higher during the peak wedding season.
2. Home Renovation
If you’re envisioning a home’s repair and renovation, it is better to finance it. Because even without transforming the room layouts, a very simple work of substituting finishes and fixtures can cost you an arm and a leg. A home renovation loan will help you remodel your home without exhausting your savings. The advantage of this personal mortgage is that the interest paid on such loans will be exempted from tax for up to Rs 30,000.
3. Festival Loans
India is a land of festivals and celebrating every festival with great pomp and show directly or indirectly leads to more expenses. A festive loan is a short-term loan offered by a bank to take care of such expenses. It is a small amount of money and has a low-interest rate (it varies from bank to bank) so that the unavailability of ready funds will not dampen your celebrations. The borrowing limit of festival-related loan is based on your salary and repayment capacity. The processing fees of festival loans are also less.
4. Holiday Loan
If you are planning a family trip but a limited budget is what restraining you from doing so, this type of loan is for you. A holiday loan will allow you to enjoy your trip without spending all your savings. Some people opt for credit cards for travelling, but a holiday loan will provide you funds easily and at a very low-interest rate. However, the total loan amount will depend on your credit history and your travel destination. The processing fee of the loan amount may also vary from one bank to another.
5. Consumer Durable Loans
If you are a tech geek or just planning to purchase consumer durables, including home appliances and electronic gadgets, you don’t need to worry about funding. Consumer durable loan is specifically designed to provide you 100 percent finance for such purchases.
6. Unsecured Business loan
If you want to set up or expand a business, an unsecured business loan is an ideal one. Usually, lenders ask business owners to maintain a collateral. In such condition, an unsecured business loan can be a huge help because the approval of this loan is not dependent on the value of your collateral. Here, the total loan amount depends on your creditworthiness and eligibility. If you are a budding entrepreneur, a business start-up loan will help you meet all your finances. To apply for a business loan, you will need an address proof, identity proof, sole proprietorship declaration, trade license, latest ITR, last 6-months bank statement and a true copy of Memorandum and Articles of Association
7. Fixed Rate Loan
As its name suggests, a fixed rate loan is a loan where the interest rate remains constant during the entire period of the loan. The advantage of a fixed rate mortgage is that the borrower can foresee his future payments. Under this type of loan agreement, the lender cannot demand repayment as long as the mortgager pays money as scheduled. So, the debtor will not have to worry about the risk of having to deal with higher interest rates as the loan term progresses.
8. Emergency Personal Loans
When you run out of your savings and have urgent cash requirements, emergency personal loans act like saviours. Many lenders offer money a borrower needs within 24 hours. Emergency personal loans work like traditional loans, which means you will a loan at a fixed interest rate for a scheduled period. Lenders may look at your ability to repay and credit score before providing emergency loans.
So, now you are aware of different kinds of personal loans. Take your decision wisely before applying for any of the mentioned loans.