Personal loans in India: Types, features, and more
What's the story
Personal loans in India provide a quick way to meet financial requirements without collateral. They are versatile, serving purposes from medical emergencies to travel plans. With a range of options, borrowers can choose loans that fit their needs. Understanding the types of personal loans available is important to make informed decisions and manage finances wisely.
#1
Secured vs unsecured personal loans
Secured personal loans require collateral, such as property or savings. They usually have lower interest rates because the lender has less risk. Unsecured loans, on the other hand, don't require any collateral and are based on creditworthiness. They are more accessible but come with higher interest rates due to the increased risk for lenders.
#2
Instant personal loans
Instant personal loans are designed for emergencies where you need quick cash. These loans are usually processed within a few hours or a day and require minimal documentation. The loan amount is generally smaller than other types of personal loans but is perfect for short-term financial needs.
#3
Salary-based personal loans
Salary-based personal loans are offered to salaried individuals based on their monthly income and employment stability. These loans are typically pre-approved by banks and financial institutions, making them easy to access. The amount you can borrow depends on your salary, with higher incomes qualifying for larger amounts. This type of loan is ideal for those looking for predictable repayments without the need for collateral.
#4
Top-up personal loans
Top-up personal loans let you increase the limit of your existing loan account without applying for a new one. They are ideal for those who have already taken a personal loan but need more funds. The interest rates are usually lower than fresh borrowings, as they are linked to your existing loan agreement. This option is convenient, as it saves time and paperwork while providing additional financial support.
#5
Balance transfer personal loans
Balance transfer personal loans let you transfer your existing loan balance from one lender to another at lower interest rates or better terms. It is an attractive option for those looking to reduce their monthly EMI burden or extend their repayment period without increasing the overall cost of borrowing significantly.