According to recent studies, as of February 2020, the personal loan segment accounted for 28% of the total banking credit. Additionally, the demand for said credit option also grew at 17% during the same time.
Not only India but the entire world has been affected due to the Novel Coronavirus (COVID-19) Pandemic. That has led to phase-wise lockdown in India and other countries to contain the spread of this deadly virus.
The surge in the lending market can be accredited to the ease of accessing a personal loan and the borrower-centric benefits that accompany it.
Regardless, to make the most of this credit option, individuals tend to look for the best personal loan in any given year. Consequently, prospective borrowers should look for different types of personal loans that are best suitable for their unique needs.
You can apply for an online personal loan from your home during the lockdown and also avail tax benefits. But, you will be able to enjoy personal loan tax benefits only if you use the money for certain purposes. Let this post guide you on this!
Types of personal loan
Financial Institutions across India, including NBFCs, offer an array of such short-term, unsecured credit to suit different financing requirements. Some of them include –
- Education loan –
Individuals planning to pursue higher education courses from prominent colleges and universities both in India and abroad can consider opting for an education loan. It allows them to easily meet expenses like tuition fees, hostel costs, library fee, etc. like without straining their finances. The easy to meet eligibility criteria and minimum documents required for personal loan keeps the application process hassle-free.
- Debt consolidation loan –
Borrowers facing substantial outstanding debt can opt for a personal loan for debt consolidation loan. It will allow them to consolidate all their debts into one. Furthermore, a debt consolidation loan will also help borrowers to save a substantial amount of interest.
- Wedding loan –
Weddings are usually an expensive affair. Some of the major areas which require the lion’s share of funding include catering, venue, jewellery and wedding attire. In recent years, the trend for a destination wedding is also on the rise. Individuals can meet all these expenses, without draining their savings, with the help of an instant personal loan.
- Travel loan –
Borrowers who like to travel frequently can consider opting for a personal loan to finance all trip-related costs, such as airfare, hotel/hostel accommodations etc. The large loan amount can also help procure accessories or equipment as well.
- Home Improvement loan –
Individuals can meet the expenses incurred to renovate or repair their home with the help of a personal loan for home improvement.
- Medical emergency loan –
Medical emergencies can occur at any time. In such cases, one can meet the pay for the associated expenses such as hospital bills, doctor consultation fees, and cost of surgery by availing a personal loan.
Things to check while selecting the best personal loan
Here’s what one must check to select the most suitable personal loan option in 2020 –
- Loan value
The best types of personal loans extend a substantial loan amount, which can reach as much as Rs.25 lakh. It allows them to meet their financial requirements with ease.
2. Loan interest
Generally, individuals should consider a lender that offers competitive personal loan interest rates. However, besides selecting a loan with a low rate of interest, individuals must also be aware of the factors affecting personal loan interest rate to improve their chances of getting a lower rate.
3. Repayment tenure
Most types of personal loan accompany simple terms of repayment and flexible tenure. Intending borrowers can use a personal loan EMI calculator to determine a suitable tenure and EMI combination that does not strain their repayment capability.
Generally, leading NBFCs like Bajaj Finserv extend a personal credit for a flexible tenure ranging between 1 year and 5 years. It allows borrowers to pick a tenure that facilitates easy repayment.
Bajaj Finserv also provides pre-approved to customers to help them have a smooth borrowing experience. Mostly, such offers can be availed on top financial products like – personal loans and business loans. Check your pre-approved offer in a few seconds by sharing your name and contact details.
- Approval and disbursal process
Individuals must look for a financier that processes personal loan application quickly and disburses the amount typically within 1 or 2 working days. Such promptness comes in handy for individuals who need immediate funding.
Other than these, individuals must also look for types of personal loan in 2020 that extends features and benefits like flexi-loan facility, loan balance transfer, etc. It will allow them to reap maximum benefit from such a credit.