What are the types of flexible personal loans available?
What's the story
In India, personal loans are a popular way to meet financial needs without collateral. However, the traditional loan structures may not always fit the borrower's requirements. That's where flexible personal loans come in. These loans allow borrowers to customize repayment terms, interest rates, and other conditions according to their needs. This article explores five types of flexible personal loans available in India, giving you insights into their features and benefits.
#1
Line of credit personal loans
A line of credit personal loan gives you access to a certain amount of money that you can withdraw as and when you need. You only pay interest on the amount you use, making it a cost-effective option for managing unexpected expenses or short-term financial gaps. This type of loan offers flexibility in borrowing and repayment, allowing you to pay off the principal at your own pace.
#2
Salary-linked personal loans
Salary-linked personal loans are tailored for employees of select organizations with tie-ups with banks. These loans come with lower interest rates and faster approval processes because of the borrower's stable income. The repayment is usually aligned with the salary cycle, making it easier for borrowers to manage their finances without straining their monthly budget.
#3
Peer-to-peer lending platforms
Peer-to-peer (P2P) lending platforms connect borrowers directly with individual lenders through online platforms. These platforms offer more flexible terms than traditional banks, including customized interest rates based on creditworthiness and risk assessment. P2P lending also allows borrowers to choose how much they want to borrow and for how long, giving them greater control over their financial decisions.
#4
Revolving credit facility loans
A revolving credit facility loan works like a credit card, where you get a pre-approved limit that you can use multiple times as long as you pay off the outstanding balance within a stipulated time frame. This type of loan is ideal for those who need ongoing access to funds but want the flexibility of repaying them gradually without incurring high-interest charges.
#5
Customizable EMI loans
Customizable EMI loans let borrowers tailor their equated monthly installments (EMIs) according to their cash flow patterns or future income projections. This could mean choosing between different tenures or adjusting payment frequencies (monthly/quarterly) based on personal preferences or financial circumstances. Such arrangements ensure that repayments remain manageable even during periods of fluctuating income levels.