The loan is the principal amount lent to a person for various financial needs with a fixed interest rate and for a fixed time. The loan is lent by the lender, which can be a bank, individual, government, or private institution. Various institutions are are available.
Money lenders such as banks offer different types of loans based on the interest rate, repayment conditions, tenure of loan, principal amount etc. These types include:
- Personal loan
- Student loan
- Small business loan
Discussed below is the definition of a personal loan and what are the personal loan types.
What Is a Personal loan?
This type of loan includes financial aid for fulfilling various purposes such as personal desires and needs. This loan is lent for personal uses such as debt consolidation, home renovation, weddings, vacations or to help friends or relatives.
Same as other loans, a personal loan is also granted for a fixed time and with a fixed rate of interest. In comparison to other types of loans, it provides lower interest rates and flexible time tenure options. Some lenders may ask for collateral, while some do not.
Types of Personal loans
One major difference between this type and other loan types is the variety in purpose that is unlike other loans. Also, it is not granted for specific needs such as education, home, vacations, etc. One can use it as needed. Listed below are the types of personal loans.
House Renovation and Improvement loan
A House improvement loan is a type of personal loan used for renovation and repairing the house. It is recommended to keep your house in a well-functioning condition to save large expenses on repairs in the future. This loan does not require collateral, it is an unsecured type of loan with flexible repayment tenure.
The wedding loan is a type of personal loan used to finance all the activities included in a wedding. learn the knowledge of roulette Several significant expenses occur during a wedding and not every individual has the capacity to fulfil them on their own. For such instances, the wedding loan comes to the rescue for all the marriage-related expenses.
The medical loan type is used for financing expenses in times of medical emergencies. When the hospital bills are beyond one’s capacity, this loan type is useful. It includes medical living expenses, medicines, hospital bills, healthy food, etc.
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The personal loan is to fulfil the personal requirements of borrowers. Various personal loan types are used to cover these personal expenses. You can opt for a personal loan at any time as it is not limited to a specific purpose. The vast variety allows us to fulfil almost every personal financial need.