Choosing between a secured and unsecured loan depends on the urgency of your need and your financial status at the time of application. The unsecured personal loan is a go-to for most Indian borrowers, thanks to its fast application and hassle-free sanction. You may be unaware that there are in fact multiple types of personal loans that you can avail.
To help you pick the right funding solution, learn about these 5 types of personal loans in India.
Secured Personal Loan
As opposed to an unsecured loan, a secured personal loan is an offering that requires you to pledge an asset such as gold or an investment in order to qualify for a sanction. Usually, lenders require the market value of your collateral to be higher than the amount you wish to borrow. Owing to the security pledged, lenders are likely to offer you a hefty sanction at an economical interest rate. These loans are great for making large expenditures such as renovating your home. However, remember that defaulting on a secured personal loan can result in the lender seizing the collateral. Therefore, you should only borrow only as much as you can repay.
Unsecured Personal Loan
Unsecured personal loans are one of the most common funding options in India. They are easy to obtain as you can avail these without pledging any collateral. However, to qualify for an unsecured personal loan, you must maintain a CIBIL score of at least 750. A score of this nature indicates your creditworthiness by summarising your repayment history and your past credit behaviour. Moreover, a good credit score allows you to command higher negotiating power, which can help you secure a better personal loan deal.
Due to the collateral-free nature of this loan, you stand to benefit from speedy approval and disbursal with top-tier lenders. The Bajaj Finserv Personal Loan is one such option, which guarantees disbursal of the full sanction within 24 hours of approval. Additionally, Bajaj Finserv also offers customised personal loans for specific needs. If you need funding to host a wedding, you can apply for the Bajaj Finserv Wedding Loan. Similarly, if you’re looking to fund your child’s overseas or college education, the Bajaj Finserv Higher Education Loan is the perfect fit as it offers an ample sanction of up to Rs.25 lakh.
Fixed Rate Personal Loan
Fixed interest rate personal loans in India are loans for which the borrowing rate remains constant. This means that once sanctioned, the interest rate for these loans do not alter all through the tenor. These loans are especially beneficial for salaried individuals, as basis your income and other expenditure you can service this loan on a fixed EMI through the entire