The demand for personal loans had increased exponentially in recent years. Recent studies show that individuals are relying on these loans to fund different aspects of their lives, including travel, honeymoon, big-ticket purchases, etc. For example, in 2019-20, 30% more personal loans were availed by Indians to fund their weddings than in 2018-19.
About The Types Of Personal Loan
To cater to this ever-increasing customer base, financial institutions introduced specialized personal loans, divided into various parts, as per the credit’s usage.
Listed below are some of the different types of personal loan you must know about.
Personal loan for wedding
Indian weddings are usually grandeur affairs, which can last for multiple days. Because of this, funding such ceremonies from one’s own savings can prove difficult. A wedding loan is an instant personal loan, which can help you cover these costs without overburdening your finances. With access to credits of up to Rs.25 lakh, one can host a regal ceremony without worrying about budget restrictions.
Debt consolidation loan
The simplest way to manage multiple dues at once is to consolidate your debts with a personal loan. One of the most useful types of personal loan, these credits allow one to foreclose all other dues.
Debt consolidation can reduce your interest liabilities as well. Borrowers should undertake a detailed calculation to assess the extent of benefits from such consolidation of credit.
Higher education loan
A standard education loan application involves significant formalities and a lengthy documentation process. In comparison, personal loans are much easier to avail from reputed lenders. The major documents required for personal loan include an applicant’s KYC, salary slips, account statements and identification papers.
On the other hand, for an education loan, individuals would need to show proof of admission to a particular college or institution. Moreover, lenders tend to provide these credits through part payments, as per the concerned course’s semester and fees. Personal loan applicants are not constrained by these restrictions.
If you are a frequent traveller, you need to know about a personal loan for travel. These loans can help you to finance family vacations or solo trips. With the large principal amount, you can even plan international tours, which might not be possible otherwise. Funding such costly trips from one’s savings can deplete his/her balance, leaving them susceptible to immense financial strain. Personal loans for travel can bridge the monetary gap while EMI repayments allow for hassle-free debt pay-off.
Home renovation loan
As the name suggests, this type of personal loan is usually availed if you are about to engage in extensive renovation in your property. Modernising an older property can be just as costly as buying a new house. Thus, availing a personal loan should help you restrict financial shortcomings arising from such renovation or changes.
Regardless of the reason to borrow, one should check the required eligibility criteria for such credits before applying. Surpassing these requirements will help a borrower avail of lower personal loan interest rates. Pre-approved offers are often extended to individuals with credit scores ranging between 750 and 900.
Bajaj Finserv provides pre-approved offers to existing customers to simplify and speed up this lending process. Such offers are provided against several financial products, such as personal loans, business loans and more. You can check your pre-approved offers by submitting only a few important details, including your contact information and full name.
Besides these eligibilities, an applicant should also submit the documents necessary for applying for a loan. However, whether such unsecured loans are available to you or not depends on your credit score. If you do not carry a good score at present, ensure effective and timely repayment of dues. Eventually, this would result in impressive CIBIL for you, enabling you to avail the best terms on your personal loan.