A Personal Loan can be applied for any purpose – be it a home renovation, a wedding, buying a gadget or going for that holiday. Your lender does not restrict the usage of funds in any form.
Besides your bank, you can avail loan from other banks, NBFCs, financial institutions, etc. Let’s explore in this article different ways of availing a personal loan in India. We will also discuss variants such as secured loans.
Of course, this might be the first option that comes to your mind when you think of a Personal Loan. Banks are your go-to lenders when you need some extra cash. Not only is this the easiest (less documentation and easy to apply, thanks to the internet) to get the required amount, but it is also the quickest (with the correct documentation and the right relationship with the bank, you can get the loan amount in as quickly as three hours!).
Another quick way to receive a Personal Loan is to ask from an employer. Most of the reputed employers give you the option of an advance, interest-free loans in case of emergency. This is known as advance salary, can be as much as your 1-6 months’ takeaway, and will be deducted from your salary with a convenient tenure. Some companies even give the employee a chance to choose their own tenure to return the loan amount.
If you have shares, mutual funds, and FDs, you can pledge these assets as collateral or security and take money from the bank. Allahabad Bank Personal Loan offers such options to individuals. When you have mutual funds and shares, the bank will loan you up to 50% of their value. In case of a Fixed Deposit (FD), the bank will loan you almost 75% of this amount. The loan amount is transferred to your current bank account, and you can access the money from here.
This is a type of loan that is offered by certain banks. A good example isof Central Bank of India Personal Loan. In this case, you can take a top-up loan of about Rs. 50 Lakhfor a maximum of 20 years or until you reach the balance tenure of your original home. This option is viable only when you have repaid the original loan.
This loan is especially recommended when you want a large sum of money. This loan is taken against your property and depending on its value; you could either get Rs. 5 Lakh or Rs. 1 crore as your loan amount. The loan has to be repaid within 15 years and the minimum time to return it is just 2 years!
For loan against property, you can use a residential property or even commercial property. The amount that you will receive from the bank varies, but mostly it is 65% of the value of your property. It is also important that for the LAP, the property must be insured.
Each of these loaning methods has their own pros and cons, and we hope that you are now better informed about them to choose the way that works best for you.