Loan schemes come in multiple forms and in varying terms. They can be used to address different purposes and meet your financial needs. The exact loan amount you can avail of and for a favorable interest rate, specific factors are considered, such as your credit history, income, debt, and more.
You can apply for a Personal Loan Online to fund a travel trip or request a home loan to buy a residential property. These days, many kinds of loans are available online. It can help to know more about the different types to aid you in making smarter financial decisions.
This article sheds light on five Types of Online Loans, their characteristics, and their usefulness in meeting consumer’s financial needs.
Also Read: Types Of Home Loans You Must Know About
One of the most significant investments in a person’s life is buying a property. To purchase realty, it requires access to substantial funds, which can be possible through a home loan. Home loans come with flexible repayment periods and attractive interest rates. This makes them a smarter option than relying on one’s savings to purchase the property. Home loans can be used for the following:
- Buy property under construction
- Purchase a ready-to-move-in residential property
- Construct new property for residential use
- Remodel existing property
- Purchase a plot of land for construction
Personal loans can be obtained to meet any personal expenses such as unexpected medical costs, wedding expenses, repaying debts, taking a vacation, and so on. Personal loans are unsecured and require some form of income verification. Personal loan interest rates in India may be higher than secured loans considering the loan does not require collateral as security.
But it is easy to apply for a personal loan, repayment terms are more convenient and with online loans offered by a host of lenders, one can obtain a personal loan quickly and conveniently. Bajaj Finserv, one of the most diversified NBFCs in India, offers India’s fastest personal loan with instant approval and quick disbursal.
Most financial institutions offer instant approval and disbursal of the loan amount. Thanks to the online application process and minimum documentation, a loan application is typically approved within minutes, and the sum is disbursed within 24 hours of approval.
Home Equity Loans
These are close-ended unsecured loans you can avail of against an owned residential, industrial, or commercial property. These loans require you to follow a fixed payment schedule over a stipulated period. Typically, home equity loans can be given for 40% to 70% market value of the mortgaged property.
Consumers find these loans attractive due to lowered interest rates. In addition, the terms of these loans can range from 15 to 20 years, which makes them ideal for those looking to borrow substantial funds. A home equity loan can be used to renovate a house, consolidate debt, pay off education loans, and others.
Small Business Loans
Banks Extend business Loans to Aspiring Entrepreneurs or start-ups to help them start or expand their business. The loan can vary from Rs. 3 lakhs to a maximum of Rs. 1 crore. It could also offer a repayment period ranging from one to five years, based on the terms and conditions of the loan contract.
However, to avail of such a business loan, business owners must submit a business plan and receive approval from the bank. In addition, working capital loans also help meet the business’ operating expenses.
Credit cards are the most popular type of open-ended loans readily available. These loans can be used to meet daily expenses such as clothing, food, transportation, buying a luxury item, and so on. This form of loan offers a maximum credit limit up to which you can borrow at one time.
The interest rates on credit cards vary depending on your credit score and payment history. While this loan has a comparatively higher interest rate, compared to other loan options, the sheer flexibility it offers ensures excellent value for money.
Today, many loan options are available to a consumer. Therefore, it becomes imperative to weigh the positive and negative aspects of every loan option before signing on the dotted line. Ensure you understand the loan agreement fully and know the repercussions of missing a monthly payment.
If you wish to apply online for a personal loan to repay debts or meet your financial needs, you can check out the personal loan from Bajaj Finserv. It involves lesser documentation and offers lower interest rates. You can obtain collateral-free loans up to Rs. 25 lakh with a flexible repayment duration between 12 months and 60 months. To know more about personal loan eligibility, use the Personal Loan Eligibility Calculator.
Bajaj Finserv also brings pre-approved offers on home loans, business loans, personal loans, and a host of other financial products. Not only do these offers simplify the loan process but also help you save on time. You can share a few necessary details and check out your pre-approved offer.