Types of Personal Loans from Banks

Did you know that over 30% of salaried individuals in India have availed at least one personal loan? The demand continues to rise, but Types of Personal Loans from Banks often confuse borrowers. So, if you’re wondering, How many types are in a personal loan? Which loan type is better?, or Can I take 4 personal loan?, you’re in the right place. This guide decodes the types of personal loans in India.

What Are Personal Loans?

Personal loans are unsecured loans, meaning they don’t require collateral. They’re offered by banks and financial institutions to meet various personal needs—education, weddings, medical emergencies, travel, etc. Due to their flexibility, many ask, How many types of personal loans from banks in India exist? The answer is diverse and categorised based on purpose, borrower profile, and repayment ability.

Types of Personal Loans in India

Here’s a categorised look at different types of personal loans offered by banks in India:

Loan Type	Purpose	Example
Wedding Loan	Financing marriage expenses	Paying for venue, catering, attire
Medical Loan	Handling sudden health costs	Hospitalization, surgeries
Travel Loan	Funding vacations	Europe trip, family holidays
Education Loan	Paying education-related costs	Tuition fees, course materials
Debt Consolidation Loan	Combining multiple debts into one	Merging credit card and EMIs
Home Renovation Loan	For house repairs and upgrades	Kitchen remodeling, repainting
Consumer Durable Loan	Purchasing gadgets/appliances	Buying a new fridge or smartphone
Pension Loan	Loans to pensioners	SBI Pension Loan for retired personnel
Top-up Loan	Additional loan over existing personal loan	For extra expenses while repaying an old loan

So, when someone asks, How many types are in a personal loan? — there are at least 9 widely used types, and this can increase depending on the bank’s offerings.

How Many Types of Personal Loans from Banks in India?

While different institutions may use different naming, most categorize personal loans based on purpose. Here’s a breakdown:

• Purpose-Based Classification: Wedding, Medical, Travel, Education, etc.
  
• Demographic-Based: Loans for salaried, self-employed, pensioners, etc.
  
• Loan Condition-Based: Secured, Unsecured, Top-Up, etc.
  

So, How many types of personal loans from banks in India? Conservatively, 10-12 mainstream types, but with hybrid products, it can exceed 15.

Which Loan Type is Better?

This depends on your needs. A medical loan is best in emergencies due to quick disbursement. Education loans offer flexible repayment post-education, while wedding loans are ideal for planned expenses. Comparing interest rates and repayment terms is crucial.

Example:

• Medical Loan: Fast approval, 10.5–14% interest
  
• Education Loan: Lower interest (~8%), longer tenure
  
• Wedding Loan: 11–15% interest, lump sum disbursal
  

So, when people ask Which loan type is better?, it’s really about matching your financial goal with the loan’s features.

Eligibility and Documentation

To apply for most personal loans, you need:

• Identity proof (Aadhaar, PAN)
  
• Income proof (Salary slips, bank statements)
  
• Employment proof
  
• Good credit score (preferably 700+)
  

Popular Banks Offering Personal Loans

Here’s a snapshot of top banks and their personal loan products:

Bank	Interest Rate	Loan Tenure	Loan Amount Range
HDFC Bank	10.75% onwards	Up to 60 months	₹50,000 to ₹40 lakh
ICICI Bank	10.50% onwards	Up to 72 months	₹50,000 to ₹25 lakh
SBI	11.15% onwards	Up to 72 months	₹25,000 to ₹20 lakh
Axis Bank	10.49% onwards	Up to 60 months	₹50,000 to ₹15 lakh

Frequently Asked Questions

1. How many types are in a personal loan?

There are at least 9–12 common types of personal loans, each tailored to specific needs.

2. Which loan type is better?

It depends on your goal. For education, go with education loans; for emergencies, choose medical loans.

3. Can I take 4 personal loan at once?

Yes, you can, but it depends on your income, repayment ability, credit score, and bank policies. RBI doesn’t restrict the number, but banks assess your debt-to-income ratio before approval.

4. What is a type 3 loan?

“Type 3 Loan” isn’t a standard term but may refer to a pension or top-up loan based on internal bank classifications. Always confirm the definition with your specific lender.

5. How many types of personal loans from banks in India?

Around 10–15 including custom hybrid products.

6. Are personal loans secured or unsecured?

Most are unsecured, but secured versions exist with lower interest rates.

Conclusion: Types of Personal Loans from Banks

Understanding the Types of Personal Loans from Banks empowers you to make informed choices. Whether you’re exploring How many types are in a personal loan?, Which loan type is better?, Or Can I take 4 personal loan?, it’s clear that banks offer versatile options for every life situation. From weddings to emergencies, knowing your options can save you stress and money.