subject: Types Of Personal Loans [print this page] A sudden need for money can arise in very short notice. Under such conditions, a personal loan can be a very good source to raise money. Such loans can come in handy when there is an immediate requirement of cash. Personal loans are advanced by banks, financial institutions and private lenders. Time stipulation for most personal loans is between 1-5 years. Within the time period, the personal loan amount must be repaid. Many a times, the time period depends upon the borrower in the form of the number of EMIs he/she will choose. Lower the rate of EMI, the longer the duration of the loan period and higher the rate of EMI, the shorter the duration of the loan.
Personal loans are advanced in lump sum to borrowers. Before a loan is advanced, the lender will usually examine the credit worthiness, the credit history, net salary of the individual, existing loans, etc. and will advance an amount which will depend upon the above mentioned criteria. These loans can range between Rs. 20,000 to Rs. 2000,000 depending upon the income and the loan repaying capacity of the individual.
Generally, a personal loan is granted without any security. So, the interest on personal will be quite high because, the bank takes a great risk in advancing such a loan. Usually, the interest can range between 14-24% in both banks and financial institutions, which is quite a high rate of interest.
Types of personal loans include
Festival Loans: Festival loans are offered to borrowers at lower rates of interest in order to meet expenses incurred during festive seasons. Most banks and financial institutions offer festival loans which are repayable within one year of time.
Marriage Loans: Marriage loans are offered to individuals to meet the expenses for performing marriages. The maximum amount that can be given by a bank will depend upon the income and the repayment capability of the borrower.
Consumer Durable Loans: Consumer Durable Loans, as the name itself suggests, these loans are advanced to borrowers to buy consumer durable goods such as consumer electronics, furniture, home appliances, etc. Repayment time will depend upon the EMIs chosen by the borrower.
Pension Loans: Pension Loans are advanced to pensioners who have retired from their services. These loans can be very useful to pensioners in meeting their personal expenses.
Other types of loans are also popular such as loan on insurance policy, loan on Provident Fund or Public Provident Fund, etc.
In their effort to reach out to more number of people, many banks and financial institutions have started providing best personal loans online. Today, we can apply an online personal loan through the portal of the bank or the financial institution. Under online personal loan schemes, the prospective borrower can calculate the rate of interest and the subsequent EMIs that he/she needs to pay and can choose the best personal loan.
Nowadays, retail financial companies have also come into the picture, providing financial services. One can also look for the best personal loan through these online personal loan schemes. In fact, these retail financial companies provide an online personal loan calculator through which one can enter details such as the amount required and the stipulated time and can obtain the EMI applicable. These services make it very easy for a prospective loan seeker.
