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The Indian banking sector boasts different Personal Loan types to cater to the diverse set of financial requirements of the customer base. The bank offers its funds to borrowers without any security, making it a popular financial product. The interest and loan amount varies significantly based on the applicant’s profile and requirements. For example, if the applicant has availed of a loan for a medical emergency application and disbursement of the loan would be smooth and convenient and might also be eligible for some discounts in interest rates.
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A Personal Loan is a financial product that provides individuals with funds to pursue their personal goals. The funds allocated to the recipient can be utilised for various avenues such as medical expenses, wedding expenditures, renovation of home, and debt consolidation.
The financial institution that provides this collateral-free financial assistance maintains an easy application process so applicants can access the funds conveniently.
As the nature of the Personal Loan is unsecured, the interest rates charged on the loans are with respect to the applicant’s profile and creditworthiness.
The bank offers a diverse range of personal loan types to borrowers in India. The types of personal loans are classed based on their requirements. This segmentation of the personal loan types eases the application process and helps banks and financial institutions to compute the loan amount and the interest rates. The following personal loan types are available in India so that the receipts can meet their financial requirements:
These types of personal loans have been identified as one of the most popular financial options in recent years. As the name suggests, short-term personal loans are offered to the recipient for a short period. This personal loan scheme owes its popularity to quick disbursement and minimal documentation. The repayment tenure can sometimes be short as six months. Almost every digital lender offers this service to its customers.
Wedding budgets in India have always been significant. The funds required to facilitate a wedding are considerable. As the wedding ceremonies signify a momentous moment in the bride and groom’s lives, the families often don’t want to leave any stone unturned. It is to be noted that the interest rates on wedding loans are considerably higher during the wedding season due to the demand.
The travel loan can allow the recipients to realise their dreams of travelling the globe. The banks and financial institutions have designed this scheme so that they can fund an individual’s dream to experience the richness of the world. The recipient of the loan can also apply for travel insurance to safeguard their trips from all fronts.
These types of personal loans can be a costly affair for the occupants. The renovation sometimes entails revamping the house from scratch. The amount required to complete the renovation can be significant, and the house owner can apply for a home renovation loan to realise their goals.
This type of personal loan offers an avenue for pensioners to obtain funds as they can apply for a loan amount that is 7 to 10 times the pension amount. The pension loan is designed to cater to various fund requirements of senior citizens in India.
This type of personal loan helps the recipient of the loan to attain their educational goals. The bank provides the loan amount to the recipient to pursue their education without financial constraints. The education loan aims to encapsulate all the budgetary requirements regarding the child’s education.
The top-up loan option allows borrowers to avail of additional funds on their existing loans. The top-up loan option allows the borrower to repay the original and additional loan amount within that tenure.
Another personal loan type that allows the recipient to raise funds from the bank for the obtainment of consumer durable goods. The applicant can easily make the repayment of the loan amount as many banks of no-cost EMIs.
The bank and financial institutions provide a variety of medical loans to customers to aid them in paying any unforeseen or significant medical expenses. The medical loans assist the recipient in paying medical bills for all treatments. The financial institutions have established a quick and easy disbursal process to cater to the emergency aspect of the loan.
India is rich in diversity, and various festivals are celebrated throughout the year. That is why many banks offer festive loans to the customers to use the disbursed funds for expenses related to the festival celebrations.
There is a diverse assortment of personal loan types offered by the Indian banking market. The interest rates on these types of personal loans vary from bank to bank. The interest rates are competitive, and some banks offer a minimum processing fee to diminish the loan cost. The following table showcases leading banks’ interest rates offered on these personal loan types.
|Commences from 11%
|upto Rs 4,999
|Commences from 10.75%
|Up to 2.5%
|State Bank of India
|10,30% – 15.10%
|Up to 1.5%
|Bank of Baroda
|9.70% – 17.05%
|Up to 2%
|Commences from 10.25%
|1.5% – 2%
|9.90% – 11.40%
|Up to 1%
|Kotak Mahindra Bank
|Commences from 10.99%
|Up to 3%
|Bank of Maharashtra
|9.40% – 14%
|Up to 1%
|Commences from 10.99%
|Up to 2.5%
*It is to be noted that the rate of interest offered on the personal loan are subject to market change.
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