11 Types of Personal Loans Offered In India

Personal loans are unsecured loans in which the lender gives you money based on your credit scores. However, personal loans have a higher rate of interest compared to other loans, such as housing or student loans. This is due to the sheer amount of risk involved in lending the money. But did you know that there are various types of personal loans? No? Well this blog gives you a detailed insight into each type of personal loan offered in India.

11 Types of Personal Loans

Here’s a list of the different types of personal loans:

1. Wedding Loan

These loans are unsecured and intended for a clear objective. Weddings can be costly, and making their way up with the funds for one can be difficult. A loan can ease the transition, especially if you have good credit scores and can obtain a low-interest rate. One can reduce the amount they need to borrow by changing their plans or saving as much as possible and taking on debt only a teeny bit.

2. Travel Loan

One can travel worldwide and pay their bills later with travel loans, which are explicitly designed for vacationers. In addition, holiday loans frequently include travel insurance, so borrowers are covered on all fronts.

1. The documentation process is simple and quick.
2. A loan of up to Rs. 40 lakh is available.
3. Loan repayment terms are flexible and can be extended for up to 72 months.

3. Medical Loan

A medical loan is a type of personal loan that provides financial protection against expenses incurred in a medical emergency. For example, medical loans can be used to pay for hospital fees, healthcare prescription expenses, surgeries, gastric bypass, chemo and radiation, and certain other roughly comparable forms of treatment.

4. Education Loan

An education loan is a sum of funds to cover postsecondary or higher education costs. Education loans are designed to pay for tuition, books and supplies, and daily costs while the borrower pursues a degree. Payments are frequently deferred while pupils are in college, and depending on the bank; they may be deferred for an additional six months after graduation. 

5. Home Renovation Loan

A home improvement loan is a personal loan that you can use to renovate and repair your residence. The loan can be used for interior and exterior home renovations such as artwork and whitewashing, tiling and floor coverings, water resistance, piping and sanitation services work, and other projects.

6. Small Cash Loan

Small Loans are unsecured loans that are given for a short period to meet urgent needs. Because no securities are required, one can apply for a Mini Cash Loan online through a relatively simple process. Certain institutions, however, only provide it to salaried employees.

7. Top-Up Loan

A top-up loan is a type of personal loan provided by the bank in addition to your other loans. Lenders provide top-up loans over your current balance, similar to how you top-up your mobile balance when it runs low. Lenders examine the capability to repay and records compared to past personal loan repayment. If the credit report is favourable, the lender will grant the top-up loan for a service fee. Lenders may revoke the service fee in certain instances.

8. Used Car Loan

A decent used car can be purchased with a used car loan. Used car loans are available with low-interest rates and repayment terms of up to 7 years; definite lenders offer loans of up to 100% of the car’s value. Most banks and non-bank financial institutions offer used car loans. A used car loan is available to both self-employed individuals and salaried workers.

9. Two-Wheeler Loan

A two-wheeler loan allows one to buy a motorcycle or scooter and pay for it in equal monthly instalments (EMIs). One must repay their Two-Wheeler Loan through Equated Monthly Instalments (EMIs), in which you pay a monthly amount until the loan is paid off. Every loan repayment instalment will be made up of a portion of principal and interest. Once you have completed your loan repayment, you can apply to have the hypothecation on your vehicle removed and gain actual possession.

10. Computer/Mobile Phone Loan

Consumers’ loan applications reflect their increasingly digital lifestyles. Almost two-thirds of recent loan applicants (65%) say they used computers or mobile devices to complete at least part of the application, up from 56% in 2018.

11. Consumer Durable Loan

A consumer durable loan is a credit/finance alternative for purchasing household, electrical, and other everyday items.

Lenders look at their annual income as well as their credit history. In addition, because consumer durable loans are unsecured, lenders pay close attention to their redemption history and CIBIL Score.

How to Apply for a Personal Loan with Navi?

Obtaining a personal loan through a loan application such as Navi is remarkably simple and swift. The following are the steps to hold:

1. Install the Navi app on your smartphone.
2. Register using your mobile phone number.
3. Fill out some basic information to determine your eligibility for a personal loan.
4. Choose the right loan and EMI amount.
5. Finish the KYC process by providing a selfie, Aadhaar, and PAN number.
6. Enter your bank account information to make an online money transfer.
7. Get instant money from the Navi instant personal loan app to your bank account.

Final Word

A personal loan can assist you in obtaining the funds you require for various purposes. However, whenever one borrows money, one must exercise caution. Borrow only what you need, and try to pay off the debt as soon as possible to reduce the interest you will pay. To get hassle-free personal loans, with interest rates starting from 9.9%, download the Navi app now!

FAQs on Types of Personal Loans

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.