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5 Best Personal Loan Options in India

If you do not have enough money to meet your financial needs, you can think of taking a loan from a bank to meet the same. But if you do not want to take a personal loan and are thinking about its better option then you are reading the right article. In this article, we will know what are the 5 best personal loan options, which will give quick and low interest loans.

Best Personal Loan Options

Personal Loan Options

1. Gold Loan

Gold loan is the easiest way to raise funds for immediate needs. Many banks and NBFCs offer gold loans with an initial interest of 7 per cent for a tenure of 6 months to 3 years. The interest rate is decided based on the purity of the gold. At present, the Reserve Bank has fixed the loan to gold ratio at 75 percent. That is, you can get up to 75 percent of the market price of gold as a loan.

2. Loan Against FD

Loan is also given in the form of overdraft against fixed deposit i.e. FD. The age of the customer should be 18 years or above. The facility of overdraft on FD cannot be given to the parents of the minor child in lieu of it. If the borrowers are unable to pay it, the bank recovers their funds by overtaking the FD.

3. Loan Against PPF

Loan can also be taken against Public Provident Fund (PPF) or Employees Provident Fund (EPF). While on EPF you can withdraw some money against your deposit, on PPF you will get a loan against the deposited money. The effective interest rate on the PPF loan will be only 1%, but you will not be paid interest on it during the loan tenure.

4. Loan Against Insurance Policy

You can also take a loan against traditional insurance policies like money back, endowment and ULIP. Loan against this can be taken only after the surrender value of the policy is decided. In case of ULIPs, the loan amount will be decided based on the prevailing market value of the insurance policy. The borrower can make regular interest payments and on maturity of the policy, the principal amount can be adjusted to the total value or can be paid with interest.

5. Car Loan

Just like you take a loan against property or gold, you can also get a loan against your car. The good thing is that it has a much lower interest rate than a personal loan. However, the car owner cannot sell it during the tenure of the loan without taking NOC from the bank. If you have a good car loan repayment history, then other banks can give you a loan of twice the cost of the car.
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