There are different reasons today we need money for. Sometimes it’s a need and sometimes its luxury. In today’s world there is no scope of compromising either on need or luxury. A lot of time your incomes and gains do not supplement your need and for those reasons, you open up for a loan. Indian market offers you different types of loan and they are available at your disposal, provided you meet different loan criteria like cibil score and more.
The most easily available loan is a personal loan. You can get a personal loan within hours of application and get funds in your emergency situations. In some cases, there are pre-approved personal loans ready for you; where you just need to log in to your bank account and within few clicks, the disbursed loan money gets credited to your account, this again depends on various factors and also should meet all the loan criteria.
Have you ever applied for a personal loan? If yes, did you explore all the available options before getting one? Which type of personal loan did you get? Was that a right one?
Yes, there are different types of personal loans. Each type of loan serves its purpose and has a unique selling point. It is important to understand them and go with the best option available which will suit your situation.
90 % of personal loans are fixed rate loans i.e. while applying for a loan, the lender will calculate an interest rate according to your loan eligibility and fix it. The interest rate will be fixed until you pay your loan off. This is one type of traditional personal loan which is offered by a lot of banks and if you are planning to get one, you will have a lot of options on the same.
It is the riskiest type of loan if you are going for it. In this type of loan, the interest rates will fluctuate according to market trends and your interest rates might go up and down every now and then. You will end up paying more interest than anticipated. The lender also has a cap on the maximum interest rate, so that you do not burn your pocket.
Installment loans are something where the installments and the period to repay are determined while you are opting for a loan. They can be secured or unsecured. This type of loan is best for people, who are looking after debt consolidation, funding house repairs etc.
Usually used by salaried individuals, also called as cash advances. In emergency situations you can withdraw cash advance against your pay cheque, the interest rates are very high as compared to traditional loans. It is recommended to be used only in emergency situations as it has high personal loan interest rate.
This is majorly practiced in credit cards. If you have over spent your limit and finding it difficult to make payment of the full outstanding amount, it is best to convert them into easy installments. The interest rates will be higher than market standards, but you will be at ease and this will not hamper your cibil score.
Single Payment Loans
A single payment loan is something which cannot be availed by everyone; they are specifically designed for business individuals and entrepreneurs. If a person is awaiting a payment and is in urgent need to money the person can opt for a single payment loan, in which he/she has to make the payment in single installment with a lump sum amount as interest.
Credit card loan
Your credit card lender can also offer you a personal loan with easy installment option depending on your repayment patterns. The installments are compiled in your credit card statements. This loan is only given on the discretion of the credit card lender; you cannot opt for it on your own.
You may need funds for various occasions, and getting them immediately is always the priority, but always go with thorough research before settling for a lender and also the type of loan. As this will help you in the long run of the loan commitment and live in financial harmony.