During the festive season, financial companies bring a variety of loan offers and discounts. This makes it easy for people to manage the fund for spending on the things of their choice. Most people like to buy high-value shopping in a festive session. Many people fulfill the dream of home at this time. For these, they manage the funds by taking loans, but there are many types of credit options in the market, due to which people face problems, which option will be better for them. Let us first know the options available in the market, then choose a better option for yourself.
Options available in the market
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Personal loan
The most well-known credit option to meet your festive expenses is a personal loan. Personal loan interest rates can range from 9 percent to 24 percent. The interest rate of the loan will depend on what is your credit score, monthly income, what is your job profile and profile of your employer. A personal loan of up to 30 lakhs can be obtained based on the repair capacity. However, in some places loans up to 40 lakhs can also be found. The time for repair is 1 to 5 years, but in some places it can be as long as seven years.
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Credit card swipes and EMI
Many merchants, e-commerce websites and retailers also offer exclusive discounts and EMI payment options in partnership with credit card issuing companies. Apart from this, some card issuing companies provide EMI at zero percent interest under partnership with merchants and manufacturers. In this, the buyer only has to pay equal to the purchase price, that too in the form of EMI.
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Loan Against Credit Card
Credit card issuing companies also provide pre-approved loan facility to some cardholders. However, this facility is available to the old cardholders whose repair history is better. Being pre-approved reduces the processing time and the loan becomes available within a few hours of applying. Under this, the loan is available from 6 months to 5 years and the interest rate starts from 10.99 percent, which depends on the term chosen to repay the loan and the credit profile of the cardholder.
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Consumer durable loan
This credit option is better for those who do not have a credit card or are looking for other loan options to buy electronic goods such as household appliances. In this, the rate of interest is determined above the lender from where you have taken the loan. Some lenders also offer the option of purchasing on EMI even at zero percent interest.
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Top-Up Home Loans
This option is available only to those who have taken home loans. The amount of loan taken under this depends on the amount of home loan and outstanding loan. The tenure of the top-up home loan will depend on the tenure of the current home loan. Its interest rate can be equal to or slightly higher than the interest of a home loan. Its processing may take up to weeks but some lenders are also providing immediate facility. There is no restriction on how you use this loan.
How to choose these options?
For big festive expenses, those who have taken home loans, it will be appropriate to take a top-up home loan. Apart from this, personal loan to other people will be right. For consumer durables and other small expenses, it would be better to take zero-cost EMI options as it can get short-term loans and it is possible to get instant loans without any documentation or very little documentation.
(Article by: Naveen Kukreja, CEO and Co-Founder, Paisabazaar.com)
