10 Types Of Personal Loan You Must Know!
Author: Arjit Chalmela
Considered as the best financial tool to raise funds for an emergency, personal loan is easy to apply for and has a quick approval. It has minimal documentation requirement and a hassle-free application process. It is indeed a go-to option, but do you know that there are different types of loans available for you? These loans can take care of your specific financial requirements.
- Festival loan: This is a short-term loan offered to handle your festive expenses. It is basically a small amount of money so that unavailability of funds does not dampen the festive mood. The loan has a low borrowing limit and a low processing fee.
- Bridge loan: This is offered to meet short term financial needs. It is generally taken to pay off the bigger loans so that you do not have to go through a stressful situation. The tenure of a bridge loan is about one year.
- Top up loan: This is a loan which is offered to you when you already have a loan. It is usually given when you are in need of funds due to an emergency and you have an outstanding personal loan. It has a tenure of 6 to 12 months and has a low interest rate.
- Wedding loan: As the name suggests, a wedding loan is one that aims at helping families and couples deal with the pressure of managing wedding expenses. You can use the funds to pay for hotel bookings, catering, jewelry shopping and more. The interest rates on this loan are usually higher during the peak wedding season.
- Holiday loan: If you want to explore the world without draining your savings, apply for personal loan online. This is a type of loan which provides for funds for your travel plans at a low interest rate. The loan amount depends on your travel destination.
- Signature loan: If you have a good credit score, you can get a signature loan to escape from financial problems. It is a loan offered to you by simply taking your signature which acts as a collateral and assures that you will repay the credit amount in time.
- Agricultural loan: This is a type of credit that is offered to farmers and helps them earn their living by performing different activities like crop cultivation, animal husbandry, purchase of tools and equipment and more. The loan has a low interest rate so as to allow farmers to earn more.
- Home renovation loan: This can help you finance the repair and renovation of your home. The interest paid on this credit is exempt from tax.
- Consumer durable loan: Many banks offer a customized personal loan to help you buy consumer durables like appliances or gadgets.
- Overdraft loan: This type of credit ensures that you never run out of funds and always have a sufficient amount in your account. The interest rate on the credit is high but you only pay interest on the amount of money you utilize.