Different Types of Personal Loans in India

Like many of us, Mohan found himself in need of quick financial support to give his home a fresh new look. Similarly, Geeta wanted to go on a much-awaited family vacation. And guess what?

They discovered that personal loans are one of the simplest ways to get through these short-term financial needs.

Personal loans are like a financial safety net. They offer fast, secure funds when you need them most. Plus, there's a whole variety designed for different situations. And with flexible repayment options, Mohan and Geeta can choose a plan that aligns with their monthly budget.

This blog deconstructs different types of personal loans in India to help you find the best fit for your ongoing financial requirements.

Different Types of Personal Loans in India

Personal loan options in India can be divided into several categories based on their end use. These loans are short-term credit options: Unsecured, quick approvals, flexible tenures, and require little paperwork. The most popular types of personal loans that borrowers can choose from are listed below -

1. Wedding Loan

A wedding loan is a specific type of personal finance instrument intended to cover the expenditures related to marriage ceremonies. You can use it for -

• Venue booking
• Catering
• Apparel
• Jewellery

Given the grandeur of weddings in India, the expenses often tend to surpass your savings. Hence, a personal loan for a wedding offers quick, unsecured credit with flexible tenures.

2. Home Renovation Loan

A home renovation loan is tailored for refurbishing or upgrading existing residential properties, like -

• Modernising interiors
• Expand living spaces
• Repair structural damages

It is different from a home loan, which finances new builds. These loans may be unsecured or secured and feature competitive interest rates and flexible repayment tenures.

Pro Tip: Ensure that the renovation expenses correspond to the property's assessed value. This will help you to maintain a safe debt-to-equity ratio.

3. Personal Loan for Education

Traditional education loans provide finances for only specific academic pursuits. However, personal loan for education are inclusive of:

• Short-term courses
• Skill development
• Higher studies (not covered under formal education loans)

The purpose of these loans, like financing tuition fees or accommodation, guides the differentiators in interest rates.

4. Medical Loan for Emergency

Medical emergencies can catch you off guard. It brings in unexpected financial burdens your way. When that happens, a medical loan can be a real lifeline. It offers you quick access to funds in circumstances, like -

• When the entire bill is not covered by insurance
• When insurance doesn't pay out right away
• When medical insurance is not available
• When several family members need cash flow in an emergency
• When you want to avoid high-interest short-term loans

With a medical personal loan, you won't have to sell your assets or dip into your investments to get through a stressful time.

5. Festival Loan

Indian festivals like Diwali and Eid call for high-end celebration expenses like shopping and gifts. Festival loans are short-term personal loans designed to ease cash flow during these occasions. However, you must evaluate the effective interest rate if the loan is rolled over annually.

6. Travel Loan

A travel loan is a personal loan designed to help you fund your dream trip or cover unexpected travel expenses. It's there to ease your financial burden, so you can travel with peace of mind.

7. Personal Loan for Salaried Professionals

Financial institutions provide personal loans for salaried professionals with a steady source of income. These loans are sanctioned based on -

• Employment stability
• Income proof
• Credit history

8. Personal Loan for Self-Employed Professionals

If you are a self-employed professional, a personal loan can be a flexible way to get quick funds without risking assets.

Since your income might fluctuate, lenders look at your business stability and overall income potential. A personal loan can help you

• Invest in new tools
• Expand your business
• Handle tax payments

9. Personal Loan for Pensioners

For pensioners, a personal loan can provide peace of mind and financial flexibility. Lenders view you as a trustworthy borrower when you have a consistent pension income.

You can easily get access to funds for

• Medical expenses
• Home repairs
• Supporting family needs
• Maintaining your quality of life
• Handling any unexpected everyday bills

Ensure Smart Borrowing with Personal Loans!

Understanding the different types of personal loans in India equips you to choose wisely. Assess your eligibility with an online eligibility calculator to save time and stay prepared. It is always a good idea to evaluate interest rates and payback conditions.

Whether you are worried about your wedding expenses or a medical emergency, apply for a personal loan online of up to ₹5 lakhs with Hero FinCorp.

Frequently Asked Questions

1. What Is the Maximum Tenure for a Personal Loan?

At Hero FinCorp, we offer personal loans with flexible tenures from 12 to 36 months. And the best part? You can apply entirely online, and you'll get approved in just about 10 minutes.

2. How Is the Interest Rate on Personal Loans Determined?

The interest rate on your personal loan depends on the amount you're borrowing, how long you plan to take to pay it back, your credit score, and your income.

3. What Happens If One Misses an Emi Payment on My Personal Loan?

In case of missing an EMI payment of a personal loan, the lender may impose late fees and penal interest. Also, it will lower your credit score.