A personal loan is one of the simplest and most convenient loans to obtain in order to fund a medical emergency, make a large purchase, get married, consolidate debts, renovate your home, and so on. The simple application process, quick approval, and low documentation requirements are just a few of the many reasons why it is a popular loan option. However, many of us are unaware that there are various types of personal loans. Have a look below to get started at Personal Loan Pro for applying for a personal loan.
Understanding a Personal Loan
Personal loans are general-purpose loans that are granted to qualified applicants to cover any personal expenses. These expenses can include medical expenses, education expenses, travel expenses, wedding expenses, and so on.
It is an unsecured loan that can be used for whatever the borrower desires. A personal loan does not require collateral or a guarantor. As a result, banks are very selective about who gets approved for a loan. The bank’s risk is very high, which explains the slightly higher interest rate and stringent approval criteria. A credit score is very important because lenders look at it first before proceeding with the approval process. These loans have a shorter processing time and are sanctioned more quickly. The most common personal loan eligibility criteria are,
- The credit score of the applicant
- Age of the applicant
- Income/Repayment capacity of the applicant
- Loan amount needed
Documentation Required For A Personal Loan
You may be required to provide your lender with a few documents during the initial application and verification process. The majority of documents can be submitted electronically.
- Loan application
- Proof of identity
- Employer and income verification
- Proof of address
While many banks offer a variety of personal loan options to individuals, some lenders may not offer different types of personal loans and instead lump them all together under a single ‘personal loan’ category. Gathering the necessary information and documents before applying for a personal loan can save you a significant amount of time as well. Furthermore, you can reduce the likelihood of having to deal with application processing and funding delays. Apply for a personal loan online with minimum documentation and a low credit score at Personal Loan Pro. Click to get your personal loans now.
Types of Personal Loans
Short Term Personal Loan (STPL)
A short-term personal loan is offered by many digital lenders and can be paid back within a few weeks to months by the lender. This type of personal loan is disbursed to your bank account in a matter of hours and requires little to no paperwork.
This loan is intended to assist couples and families dealing with the financial stress of a wedding. It can be used to cover major wedding expenses such as the venue, guest accommodations, jewelry, catering, and decoration. The interest rates on these loans are typically higher during peak wedding season versus off-season.
This loan is provided by the same lender from whom you previously obtained a personal loan. With a top-up loan, you can borrow more money on your existing loan and repay it within the same term. However, the lender will only offer you this type of loan if you have been on time with your payments.
If you are planning a vacation and want to cover your travel expenses without depleting your savings or affecting your monthly budget, this is the loan for you. While credit cards can also help, a holiday loan can make funds available for your travel plans quickly and at a low-interest rate.
To deal with any financial emergency, pensioners can borrow at least 7 to 10 times their pension as loans. Typically, this loan can only be obtained from the same bank from which the pensioner receives his or her pension.
This type of personal loan is available to farmers and assists them in purchasing various farm equipment, tools, and raw materials. This loan has a very low-interest rate, which encourages farmers to earn more money by increasing productivity.
Home Renovation Loan
Your home and lifestyle should evolve with the times. This loan, as the name implies, can assist you in financing the repair and renovation of your home. So, if you’ve been thinking about repairing a leaky ceiling or installing wood flooring, this loan can help you without depleting your savings.
Nobody knows what will happen tomorrow, but you must be prepared for the worst. This loan helps to ensure that you never run out of money and that you have enough money in your account in case of an emergency. This loan has a higher interest rate, and you only pay the interest on the amount of money you use.
Consumer Durable Loan
Banks also provide consumer durable loans with no EMI. This loan can be used to buy any consumer durable item, such as a phone, refrigerator, furniture, washing machine, microwave, and so on. The product’s cost is divided into EMIs, which can be repaid over a set period of time. Some of the products may require a deposit or a processing fee, while others may not.
If you have a medical emergency and do not have enough funds to pay your medical bills, you can apply for a medical loan and receive immediate funds to pay those large bills.
A personal loan for higher education can cover all of your expenses such as college fees, books, housing, tuition fees, travel, and so on. Students with a co-applicant (guardian/parents) can apply for this type of personal loan.
This type of personal loan is available only during the festival season. This loan has a low borrowing limit, but it usually comes with a lower interest rate and a lower processing fee. Other appealing offers on this type of loan may also be available.
So, this was all about personal loans and their different types. Gathering the necessary information and documents before applying for a personal loan can save you a significant amount of time. Furthermore, you can reduce the likelihood of having to deal with application processing and funding delays. Apply for a personal loan online with minimum documentation and a bad credit score at Personal Loan Pro.