Types of Personal Loans for Various Needs

Types of Personal Loans for Various Needs

Different loan forms are suitable for different borrowers, regardless of whether they are financing a college education, a wedding, a home or vehicle purchase, or even something more specifically personal. It's a good idea to become familiar with these loan kinds and their finer points, such as payback terms, APRs, and credit standards.

Knowing the distinction between fixed and variable interest rates, secured and unsecured loans, and other financial terms will help you become a more knowledgeable borrower. Therefore, let's provide answers to the following questions so that we are prepared to obtain the appropriate kind of loan when the time comes.

Types of Personal Loan in India

Private lenders are unsecured loans where no collateral is needed and the bank bases its decision to lend you money on your creditworthiness. Nevertheless, given the level of risk involved in providing the money, personal loans have higher interest rates than other loans like house loans or student loans. Personal loans are often available from 50,000 to 15 lakh rupees from most institutions.

What Are Different Types Of Personal Loan?

• Home renovation loan
• Wedding loan
• Study loan
• Pension loan
• Travel loan

Wedding Loan

In India, weddings are big events that cost a lot of money. The majority of individuals want to make their wedding day unique and memorable by going above and beyond. Banks provide wedding loans to assist you in making your special day unforgettable. Loans can be obtained by the prospective bride, groom, or any of their family members.

Key Points:

• The loan amount ranges from Rs.1,000 to Rs.25 lakh.
• Loan payback terms range from three to seventy-two months.
• Minimal method for documenting

Documentation needed for a wedding loan

While various lenders may request a different set of papers from you throughout the loan application process, the fundamental ones that the majority of them may ask for from applicants are given below:

• Valid Proof of Identity:
• Voter ID
• A passport
• PAN card
• Aadhar card
• Driver's license
• Ration card (NREGA)
• Job Description

Valid Address Proof: For the wedding loan application, the following papers are acceptable address proof:

• A driving license
• Passport
• Ration card
• Aadhaar card
• Rental Agreement for Water/Electricity/Telephone Bills
• Voter Identification Card

Age Verification: Typically, applicants are not required to submit a second proof of age.

Also read about how personal loan for wedding can help

Home Renovation Loans

Home loans are used to purchase brand-new real estate. What happens, though, if your ancient home needs urgent repairs? Due to the significant expense of renovations, people frequently don't do them. Home improvement loans assist you in covering your repair expenses while also raising the economic worth of your home on the market.

Key Points:

• From 2 lakh to 40 lakh rupees is the range of the loan amount.
• 30-year maximum loan payback period
• Interest rates begin at only 6.85% per year.

All candidates must provide the following documentation as proof of identity:

• Driving License
• Voter ID
• Valid Passport
• Aadhaar Cards

These are all acceptable identification.

Education Loan

A variety of lenders provide personal loans that can be utilized for educational purposes. You can utilize the education loan to pay for any necessary expenditure, including your child's tuition and any other academic obligations.

Key Points

• Up to 15 years are allowed for loan repayment.
• Interest rates begin at only 6.35% p.a.
• Up to Rs. 20 lakh in loan amount

A Student Loan Requires Documentation:

• Banks demand a precise set of paperwork before they would authorize college loans. This set of documentation is the same for all lending institutions. The following documents must be provided by an education loan application.
• Certificates of completion, proof of age
• Proof of permanent residence
• Identity documentation, such as a passport, voter ID, or a driver's license, is required.
• Income co-applicant/guarantor proof
• Fully completed guarantor form
• A copy of the admission letter for the education programme
• If the bank requires it, co-applicant bank account statements

Also read about personal loan for students

Pension Loan

Pension loans are only available to retired people, thus the regular qualifying requirements do not apply under this particular arrangement. Some banks under this programme provide 7 to 10 times the pension the retiree received in the month before completing the loan application.

Key Points:

• Starting from Rs. 25,000 and up to Rs. 14 lakh in loan amount
• A maximum 60-month loan payback period
• Lowest discounted interest rate possible: 11.70% per year.

All candidates must provide the following documentation as proof of identity:

• Driving License
• Voter ID
• Valid Passport
• Aadhaar Cards

These are all acceptable identification.

Travel Loan

You may explore the world and take care of your expenses afterwards using holiday loans, which are made just for vacationers. Travel insurance is frequently included as an extra advantage with holiday loans, giving you complete protection.

Key Points:

• The documentation procedure is simple and fast.
• A loan of up to Rs.40 lakh is possible.
• Flexible loan payback schedule that can be prolonged by up to 72 months.

Documents Required

Customers may obtain travel loans from the majority of the leading lenders on the market with very little paperwork. However, while requesting travel loans, several essential documents must be presented (even electronically). The following is a list of a few of these documents:

Proof of identity

• Address verification
• Proof of income (pay slip or IT returns)
• Pictures
• For travel loans, different firms may have different specific documentation requirements. You may get the list of papers that must be presented on the lender's official website or by contacting a company representative.