Two Types Of Unsecured Loans You Should Know About
Conventionally, two types of loans are available in India, secured or unsecured. However, unsecured loans are often the most viable financing solutions in emergency financial requirements. In addition, eligible borrowers can obtain unsecured loans such as personal loans from lenders. These loans are standard because the lender does not require any collateral. There are, however, many types of unsecured loans available in India.
A secured loan requires collateral on the best loan app, whereas an unsecured loan does not. In contrast to secured loans, unsecured loans are approved based on borrowers’ creditworthiness rather than their assets. Examples of unsecured loans include personal loans, credit card loans, and student loans.
Here are a few most popular unsecured loans available in the market.
- Personal loans
India’s most popular unsecured loan is known for offering instant funds, even on a new loan app. However, since this loan is unsecured, the interest rates are usually higher. On the other hand, you can enjoy competitive interest rates on this type of credit without a problem with a stable income source and a good credit score.
Consumers apply for a personal loan for varied uses based on their end-use. A few of these include:
- Debt consolidation loan
This personal loan is taken to consolidate all existing debts into one. This loan combines all loan EMIs and credit card bills into one EMI repayment on a particular day of every month. As a result, it reduces the repayment burden with decreased interest payable.
- Wedding loan
Weddings, especially in India, are a costly affair. Therefore, you can opt for a wedding loan to cover the expenses for the entire wedding and make it a memorable one. You may also be in a favorable position to bear the wedding cost. You may have to loosen your purse strings from time to time, however, since you’ll encounter varied, modest expenses. A revolving loan would be the most suitable solution to handle low or meager payments in such a circumstance.
- Vacation loan
If a consumer wants to finance a trip in total, they may consider a term loan. In addition, they may opt for a revolving loan to meet recurring or variable expenses of food, shopping, or activities. Many also carry a credit card used worldwide for expenditures at any currency denomination.
- Business loan
As its name suggests, an app loan offers business loans only to established companies. Borrowers need not place collateral with the lender to obtain the loan. Loans of this kind are available to eligible borrowers who can use the funds strictly for business expenses.
No matter if you’re a budding entrepreneur or a business professional looking to expand your business. Small business loans offer customized solutions to meet all of your needs. You can take out a business loan for anything from financing your capital requirements to expanding your premises to hiring new staff. A few advantages of opting for a small business loan include.
- After your loan application is approved, the amount approved will be credited to your account within 24 hours, with only a few documents needed to begin operation.
- Select a repayment term that suits your needs from twelve to sixty months and plan your repayment to coincide with the flow of your funds.