Different Types of Personal Loans in India

Personal loans are quite popular in India. But did you know that there are multiple types of personal loans? The past few years have experienced tremendous growth in personal loans from a risky business to a settled space taken over by numerous lenders and borrowers. Financial institutions offer different types of personal loans. According to the Reserve Bank of India (RBI), approximately 96% of incremental non-food credit in 2018 was accounted for by personal loans.

Here are the types of personal loans offered in India:

Wedding Loan

Weddings are an extremely important event in India. They come with a long list of expenses. All of us dream for this day (for ourselves as well as for our children) to be very memorable, and there is nothing we wouldn’t do to fulfill this dream. Thus, many lenders have started offering personal loans for wedding, which help us make our special day memorable. Loans can be taken by the would-be brides, grooms or any of the family members. In this type of personal loan, the loan amount can be customized as per the individual's needs.

Travel Loan

This is designed especially for people who love holidaying. They are called travel/vacation/holiday loans, wherein one can go around the world, however, pay the bills later with holiday loans. In this type of personal loan, there's often an added benefit of travel insurance, in order to give foolproof protection.

Must Read: How To Choose a Personal Loan?

Home Renovation Loan

Taking home loans is very common for buying real estate but we rarely consider what happens when we have to renovate our houses. We either postpone it because it is an expensive exercise, or end up compromising on several aspects in order to manage costs. Thus identifying this need, home improvement loans are offered, which help us take care of repairing costs, buying new material, labourer’s charges, etc. This type of personal loan which helps us renovate our house, gives the added advantage of boosting the total economic value of the house in the real estate market.

Pension Loan

Pension loans are meant for retired personnel. Hence the regular eligibility criteria do not apply in this loan. Here some banks provide a few times of the amount of pension the pensioner would have drawn in the month previous to submitting the loan application in this type of a personal loan. As per the personal loan eligibility calculator, pension proof is needed to be submitted. Pensioners are allowed to can borrow for any kind of expenses like medical bills or daily expenses.

Education Loan

This is one of the most popular types of personal loans and has existed for decades. Generally, parents sign up for education loans and their kids then take over and pay it up. Also known as school fee funding, one can also use such a loan for paying the tuition fees of one’s child, or a big academic requirement like going abroad.

Must Read: How to Fund Child's Education with a Personal Loan?

Festival Loan

Lenders offer loans for celebrating festivals, which can help one in preparing for the festivities and in hosting parties. This is a new and different type of personal loan.

Consumer Durable Loan

Appliances or Consumer Durable Loan is offered for purchasing white goods.

Computers & Mobile Phones Loan

Lenders offer computer loans as well as mobile phone loans for the exclusive purchase of computers and laptops. Some lenders offer insurance along with the loan.

Personal Loan Features and Benefits

• The documentation is easy and quick. Usually identity proof, address proof, income proof, and photos are the documents required.
• Repayment is flexible
• Personal loan eligibility checker is simple

Personal Loan Eligibility

For Salaried Professionals:

• The minimum age to apply for a personal loan is 21 years and the maximum age is 60.
• The applicant needs to have a total of two years of employment with one year at the current organization and should be up to Rs. 25,000 per month (for residents in Mumbai and Delhi only) or up to Rs. 20,000 per month (for all other locations).

For Self Employed:

• As per our personal loan eligibility checker, the minimum age for Self-Employed Professionals and Businesspersons is 25 years and the maximum age is 65.
• The applicant should have proofs to display a stable income and profitable business operations for at least 2 years.

Personal loan eligibility is clear and makes most people eligible. There could be additional documents required in certain types of personal loans case to case.