Personal loans are unsecured loans and can also be secured loans sometimes that can be availed for meeting your immediate financial needs. If you are planning to go on a trip and are in need of funds, then you can go for a personal loan. Or if there is a medical emergency and you are not able to cover the expenses, you can get a personal loan. There are different types of personal loans that can work best for you depending on factors including your credit score and the tenure you need.
Different types of personal loans
Unsecured personal loans
Unsecured personal loans are availed without any collateral being pledged to the financial companies. As they are unsecured loans, they come along with high interest rates compared to other loans. These loans can be used for medical expenses, travel expenses, wedding expenses and so on.
Secured personal loans
For these loans you’ll have to pledge collateral, so the interest rates will be less than that of unsecured personal loans. Generally, the collateral will be a type of property like land, houses, gold etc.
When it comes to fixed rate loans you can fix a rate that you can pay constantly on, throughout your tenure period. If you want to make consistent payments each month, you can go for this loan.
You can take variable-rate loans when you are planning to repay the loan within a short term.
Debt consolidation loans
You can get debt consolidation loans when you are trying to pay off multiple debts in one EMI payment.
Additional Reading: What is best banks for unsecured personal loans?