Gone are the days when people had to make do with what they had due to a lack of financial options. Personal loans in India are often used for these purposes and come without collateral, which is often a 100% plus benefit. Personal loans are a flexible offering whether it is for a wedding, medical expenses, a debt consolidation loan or even if you just need to go out and buy a new car. We examine some different types of personal loans in India and show you how to fill out an online personal loan application.
Types of Personal Loans in India
1. Unsecured Personal Loans
Unsecured personal loans are the most popular because there is no collateral needed from the borrower. Typically, unsecured loans rely on the creditworthiness, income, and ability to repay of the applicant. They are best suited for borrowing for weddings, vacations, and emergencies like medical issues.
2. Secured Personal Loans
Secured loans require the borrower to pledge an asset, such as property or gold, as collateral. These loans typically offer lower interest rates and higher loan amounts compared to unsecured loans. They are suitable for individuals looking to borrow larger sums for purposes like home renovation or business expansion.
3. Wedding Loans
Wedding loans are tailored to cover the expenses associated with weddings, including venue booking, catering, attire, and other related costs. These loans are often unsecured and come with flexible repayment options to ease the financial burden during the wedding period.
4. Travel Loans
Travel loans are set up to pay for either domestic or international travel. Travel expenses can be flight tickets, accommodation, and entertainment to name a few. Travel loans are unsecured, and suited for those who have plans to travel but do not have the funds available.
5. Home Renovation Loans
Home renovation loans assist homeowners in financing repairs, remodeling, or improvements to their property. These loans can be secured or unsecured, depending on the lender’s policies and the loan amount.
6. Debt Consolidation Loans
Debt consolidation loans help individuals combine multiple debts into a single loan with a lower interest rate. This simplifies repayment and can reduce the overall interest burden. These loans are typically unsecured and are beneficial for those managing multiple credit lines.
7. Education Loans
Education loans are specifically designed to cover the costs of higher education, including tuition fees, books, and living expenses. These loans can be secured or unsecured and often come with tax benefits under Section 80E of the Income Tax Act.
8. Top-Up Loans
Top-up loans are additional loans taken over an existing loan, allowing borrowers to access extra funds without the need for a new application process. They are suitable for individuals who have an existing loan and require additional funds for unforeseen expenses.ICICI Bank
9. NRI Personal Loans
Non-Resident Indians (NRIs) can avail personal loans to meet financial needs in India. These loans are typically unsecured and come with flexible repayment options, making them convenient for NRIs to manage expenses back home.
How to Get a Personal Loan Online
Applying for a personal loan online has become a seamless process, thanks to digital advancements in the financial sector. Here’s a step-by-step guide to help you get a personal loan online:
1. Research Lenders: Begin by researching various lenders, including banks and non-banking financial companies (NBFCs), to compare interest rates, loan amounts, and repayment terms.
2. Check Eligibility: Ensure you meet the eligibility criteria set by the lender, which typically include factors like age, income, credit score, and employment status.
3. Gather Documents: Prepare necessary documents such as identity proof, address proof, income statements, and bank statements.
4. Apply Online: Visit the lender’s official website or mobile application to fill out the loan application form. Provide accurate details and upload the required documents.
5. KYC Verification: Complete the Know Your Customer (KYC) process, which may include biometric verification or video KYC, depending on the lender’s policies.Axis Bank
6. Loan Approval and Disbursement: Upon successful verification, the lender will approve the loan and disburse the funds to your bank account. The disbursement time may vary between lenders.
Many leading banks and NBFCs offer online personal loan applications with minimal documentation and quick approval processes. For instance, ICICI Bank provides an instant personal loan online in just five steps, ensuring a hassle-free experience for borrowers.
Conclusion
Personal loans in India offer a versatile solution to meet various financial needs. Understanding the different types of personal loans available can help you choose the one that best suits your requirements. Additionally, the convenience of applying for a personal loan online has made the process more accessible and efficient. Always ensure to compare different lenders and read the terms and conditions carefully before proceeding with the loan application