Personal loan: Where to apply for it? Here are 5 key options | Mint

In case you fall short of money and urgently need it, one of the most feasible options is to raise a personal loan. There could be numerous reasons for raising it. For instance, you need some money to go on a vacation abroad, or you need it to consolidate your existing loans, or for renovating the house, and so on and so forth. Different people have different reasons to raise a loan since their priorities differ from each other.

For instance, someone requires money to buy an expensive watch whereas the other needs it for a medical emergency. There could be someone who needs money for his child’s higher education whereas the other person needs it to buy jewellery to gift his partner on her anniversary.

Notably, there are different ways to meet this requirement.

One could raise a loan from a bank such as SBI, HDFC Bank, Kotak Mahindra or Bank of Baroda, among others. Alternatively, one could also get a loan from an NBFC (Non Banking Financial Corporation) such as Bajaj Finance and Shriram Finance.

Alternatively, you could also seek a loan from one of the mobile lending apps which, invariably, are linked to an RBI-registered NBFC.

Here we list out key ways to raise a personal loan:

1.Bank: Raising a personal loan from a bank is one of the most feasible things to do. Banks offer loans at a low rate of interest but require borrowers to have a good credit score, say above 700. It is recommended to approach the bank with which you share a good banking relationship.

It could be a private bank such as ICICI Bank, Federal Bank, Kotak Mahindra Bank or HDFC Bank, or a state lender such as State Bank of India (SBI), Bank of Baroda, and Punjab National Bank, among others. The repayment can range between 12-60 months.

2.NBFC:If a bank happens to decline your loan application, the alternative that you can explore is to approach an NBFC. These include Bajaj Finance and Shriram Finance, Aditya Birla Finance, L&T Finance, among others.

3.Fintech app: There is another option to raise a personal loan which is through a money lending mobile app. These are easy solutions for quick disbursal of small loans, say ₹1 lakh or so. The repayment tenure typically ranges between 3 to 24 months.

4.Pre-approved loan: If your credit score is very high, the chances are that your bank will offer you a pre-approved loan which is typically reflected on your net banking.

This loan may have a moderate rate of interest — somewhere between low and high — but the good thing is that this loan doesn’t require any submission of documents. Since this is pre-approved, it leads to quick disbursal of money.

5.Loan against credit card: Besides the lending options mentioned above, one can also raise a loan against a credit card. This leads to the blocking of credit card limits but the rate of interest is quite similar to what is charged on a personal loan.

(Note: Raising a personal loan has its own risks)