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Know the different types of personal loans

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Generally, at times unanticipated financial exigencies or expenses may propel you to apply for the debt. Bajaj Finance personal loan or personal loan through other lenders are one of the prudent forms of credit during such situations. Such loans are suitable if you require a particular amount on a 1-time basis. They can be repaid in the form of EMI or instalments over a specific tenure or term with interest.

Note that this loan is considerably versatile in nature and comes in distinct forms. Listed are distinct kinds of personal loans available in India:

Unsecured personal loan

An unsecured personal loan does require collateral or asset, and thus it can be simpler to acquire this kind of personal loan. You should have a strong credit score (usually 750 or more) and an adequate regular source of a monthly income of generally Rs 25,000 per month to avail of the unsecured personal loan.

Secured personal loan

As suggested, a secured personal loan is nothing but borrowed against security like a car, home, savings account, gold, insurance, and various other assets. In a situation where you default on a loan, the lender can seize the asset mortgaged to cover all of it or a portion of the balance. The rate of interest on different kinds of secured loans is generally lower than unsecured loans. You can go for a secured loan or unsecured personal loan based on the availability of security or collateral.

Personal credit line

A personal loan credit line is a revolving credit form, just like credit cards. Unlike instalment loans that include a lump sum amount to be repaid in the form of EMIs, seekers can get access to personal credit lines of up to a particular amount that can be availed whenever required. Interest is charged just on balance outstanding. You require a good credit score and a strong credit history to apply for the credit line.

Personal loan against credit card

Your credit card can provide a cash advance, which is nothing but a short-term personal loan that you can take up against your available credit card balance. Though you will be using your card, you may not necessarily hold the same interest rate on the credit card loan as a normal purchase. The interest might start accruing the moment you withdraw the money, and you will also have to pay the processing charge.

Pension loan

A pension loan is a personal loan exclusively for retired personnel. Usual eligibility criteria as applicable for other generic loans do not apply here. As per the pension loan, a few banks, particularly the public sector banks, might offer seven to ten times the amount of the pension to the pensioners if they submit a loan application. Such loans have longer repayment tenure and shorter loan amounts.

Note that personal loans can be simply categorized based on distinct interest rate types, as follows:

Fixed interest rate personal loan

Personal loans generally come with the fixed interest rate option, which means the rate stays unchanged for the whole loan tenure and so makes the month-on-month repayments in the form of EMI. For such kinds of loans offered by the bank, you will get an idea of how much the EMI would be each month. With Bajaj Finance personal loan EMI calculator, you can easily estimate the EMI much before you apply for the loan.

Adjustable-rate of personal interest loan

Few lenders might even provide variable, adjustable, or floating rates of interest on personal loans. As per this loan, the rate of interest is subject to change over time instead of having the same interest rate forever. The rate of interest for such loans generally starts quite low, and after a specific time period, it might enhance based on the market conditions so that the EMI can be high or low.

Lenders like Bajaj Finance personal loan might provide personal loans depending on the need of the borrower. The personal loan types are based on the requirements and can be categorized in the listed variants:

Use a personal loan to consolidate debt

A debt consolidation loan is a kind of personal loan that can be obtained for paying various existing loans and credit card debts with a single personal loan via single monthly instalments. It can assist you to lower the overall monthly costs into affordable payment.

Wedding loan

In case you have a wedding wish list such as dream destination wedding, gorgeous diamond ring, dreamy décor, tempting cuisine and designer wedding outfits, you can avail wedding loan or marriage loan. Such loan covers all your marriage linked expenditures involving makeup, catering, photography, venue booking, event managers, hiring choreographers, shopping for the best wedding jewellery and dress and others.

Travel loan

A travel loan, even a vacation loan, can get obtained to soothe all your wanderlust. The loan covers all the travel linked expenditures involving flight ticket booking, local fares, accommodation, visa fees, travel insurance, meals, various activities like snorkelling, scuba diving, skydiving, paragliding etc., tour guide and others. You can also easily apply for a holiday loan to go on a dream vacation with friends, family and loved ones without requiring worrying about money.

Home renovation loan

If you wish to give a makeover to your old home, you simply can apply for a home renovation loan. Such loan covers home renovation repair expenses, like purchasing new furniture, remodelling of the kitchen, interior designing, changing of electrical wiring, painting, getting new fittings and fixtures etc.

Medical exigency loan

As the name suggests, medical exigency loan can simply be availed for meeting your medical, urgent needs like paying medical bills, checkups, urgent surgery, treatment etc. Such loans are handy when you do not have medical insurance or the limit of insurance is not adequate to cater to expenses.

Higher education loan

Higher education loans can be availed by applicants to pay for the higher education of their kids. Such loan assists to pay off admission fees, books purchase, tuition fees and various other expenses linked with education.

To know which personal loan would best suit you, you can contact Bajaj Finance personal loan customer care number for advice or other lenders’ customer care numbers.