5 Types of Personal Loans For Both The Unemployed And The Employed

5 types of personal loan

5 types of personal loanAs an owner of a credit card, wondering about how to avail an Instant personal loan online is normal. Also you may worry about the repayment under a stressful situation. Whether or not you want to pay on time, there is more to personal loan advantage for both employed and unemployed individuals. There are multiple options in personal loan that will address different situations in life. Below are the types of Personal loans you may avail in India and get it at lower interest rates and repay in short time.

One of the biggest aggregators of loans in India currently is Buddy Loan which disburses loans at lower interest rates starting at 11.99% p.a. They also have customized EMI options that will easily help you work on your credit score.

Many things that were unaccounted for during significant events, a business expansion, or a medical emergency may come up. Such as an increase in the cost than initially intended. These emergencies can cause unnecessary stress, which we do not want. So, make the most of the offers from Buddy Loan for an instant personal loan online.

Also Read: EMI points for availing a car loan more easily! 

Personal loans

Anyone seeking a loan would look for a personal loan at lower interest rates starting at 11.99% p.a. A personal loan can be an unsecured loan or a secured loan, and you can also choose whether you want a short-term or long-term personal loan. An unsecured loan is one where you do not have to pledge any asset or provide any collateral to avail of the loan. You can also choose the interest rates that you prefer. However, your credit score is the most important criterion that decides the chances of loan approval.

 

A personal loan covers unavoidable costs, such as health facility payments and even making investments to pay off other plans, such as home upgrades that may increase your property’s value.

What a Borrower Needs To Know

There are certain factors a borrower will need to look for when applying for a loan. Using the EMI calculator, estimating the cost of wedding expenses, emergency services, gold bonds, and more will help borrowers to understand their goals and plan accordingly. An EMI scale is present in every loan site. It will help you calculate your monthly EMIs, the total sum of interest rates, and more. You can auto-check your credit score, making it easier for you to maintain it. Research the loan offers carefully, along with the EMIs that the financial institution can provide, before applying for a loan.

Eligibility Criteria 

A borrower will be eligible for a personal loan if they are at least 25 – 60 years old. A salaried or self-employed borrower would have a higher chance of loan approval with a minimum salary of Rs. 20,000/-. However, an unemployed person can also get a loan if they have a good credit history. The loan’s approval and interest rates depend on the borrower’s credit history.

If the applicant wants to avail instant personal loans, they can use Buddy Loan, which offers up to Rs. 15 lakhs for an application. The borrower can further discuss the best EMI options with the lender between the loan tenure of 3 months to 5 years.

EMI & Tenure

The Buddy Loan App disburses personal loans at lower interest rates if you have good financial behaviour and credit history. The loan tenure is from 3 months to 5 years. Specifying your concerns with the lender would be a better option, as they can often customize the EMI payment to enhance your credit score.

Also Read: Buddy Loan: The Best Lender for an Instant Personal Loan

Benefits of Banking Online For a Personal Loan

  • Interest rates starting from 11.99% p.a.*
  • Avail loan of amounts up to ₹ 15 lakh
  • Minimal documentation or paperless
  • No security/collateral is required for a loan at any point.

Types of Personal Loans in India

Primarily, personal loans are classified into the following types.

  • Long-Term Personal Loans.
  • Short-Term Personal Loans.
  • Lines of Credit.
  • Alternative Financing.
  • Peer to Peer Lending

Also Read: 4 Ways To Get Instant Personal Loan Without a Credit score

However, personal loans can be further distinguished into unsecured & secured, fixed and variable-rate and debt consolidation loans.

  • Long-Term Loans:

Long-term personal loans are unsecured loans from massive commercial lenders for business projects, expansion, acquisition, and working capital. A long-term personal loan is a type of loan with a repayment tenure of about three years or more and can be repaid monthly. A personal loan with more than a five years term might need to be secured with property or other financial assets.

The most significant benefit of long-term loans is they have lower interest rates and ample time to repay with EMIs. This loan is easier to obtain if you have a well-established business with strong returns and a solid growth plan. However, long-term loans may cause higher repayments due to interest rates and other fees.

  • Short-Term Loans

Short-term personal loans are loans that have a shorter tenure for repayment. As the loan time is short, the repayment will be at the end of the loan term. A short-term loan can be used for smaller projects that yield quick results. These loans can be repaid in 1-2 years. They are great for seasonal businesses of banks, NBFCs, or any financial or IT institutions.

  • Credit Lines

A credit line is a flexible loan from financial institutions that are given at a fixed amount. These include credit cards and short-term loans that can be accessed anytime. Interest is charged as soon as money is borrowed, and the compound interest also increases over time. It is best to use these cards when in dire need.

  • Alternative Financing

Alternative financing is based on crowdfunding resources, asset loans, peer-to-peer & even cash advances. Depending on your business’s regular income or revenue generation, these loans can be short-term or long-term. This kind of financing differs from traditional financing of banks and capital markets as they are more technology-based. Cryptocurrency like Bitcoin is also part of alternative financing.

  • Peer-To-Peer Lending

Peer-to-peer lending, or P2P, is a kind of alternative lending where the borrower directly borrows money from the lender without a mediator or banking institution. Crowdfunding and social lending are also a kind of peer-to-peer lending. Lenders can get more profits, and borrowers can get loans at a lower interest rate.

Peer-to-peer financing is based chiefly on technology finance, where borrowers and lenders meet each other through websites. LendingTree.com is one of the websites that offers P2P.

Advantages of Personal Loan

  • Unlike many other financial options, personal loans are used for all commercial and personal financial shortcomings.
  • It could be for any medical emergencies or consolidating all the earlier debts.
  • There are decent interest rates for long-term and short-term loans and secured or unsecured loans.
  • Many sectors disburse loans with customized EMI options and lower interest rates depending on your credit scores. An excellent credit score is optional, but a reasonably good score can lower the interest rates during approval.

 Also Read: Looking to Apply for a Personal Loan? Advantages of using a Third-Party Aggregator Website

Conclusion 

A personal loan is an excellent concept for purchasers. It gives them a chance to heighten their credit scores. But if you do not have graceful credit, a private mortgage would also give a good interest rate and can be more significant than some credit score card fees. Understanding your personal loan choices will help you get the desired plans. Do not aim to get a personal loan simply because it is the last resort.