Different Loan Types and Interest Rates

During financial urgency, availing an instant loan is the best solution. It helps people meet urgent cash requirements, pay off bills, fund new business, or even fulfil other requirements without exhausting the savings. With the advancement in technology, digital lending has become extremely popular. It has proved successful in helping the borrowers avail loans easily and quickly without any hassle. The traditional lending and borrowing system was very sluggish. People used to wait in long lines for long hours to get their loan requests approved, but with digital lending, all these hassles have ended. Various types of loans are available, and you must choose the one that suits your financial needs. Keep reading to know more about such instant loans or instant personal loans that can help you in your times of need!

Instant Personal Loan

An instant personal loan is an unsecured loan that is used for meeting urgent cash requirements. To avail this loan, the borrower does not have to put up their assets at risk. This loan can be obtained for a few hundred to thousands of rupees with a 2 to 5 years payback period. The borrower needs to verify their income source and assets worth at least as much as they want to borrow.

On an average, banks' personal loan interest rate ranges from 10.5% to 24% per annum. Factors that affect interest rate include income of the borrower, employers details, nature of employment and age. Moreover, if you are interested in getting the lowest interest rate on your loan, then you must follow the below-mentioned tips:

Improve your credit score.
Avoid missing repayments.
Track the offers.
Compare interest rates.
Negotiate with the lender.

Home Equity Loans

The borrowers can borrow up to the amount that they own in terms of their own homes. The amount that can be borrowed is the difference between the current market value of the home and the amount still owed on the mortgage.

The advantage of availing home equity loans is that the interest rate charged on these loans is far less than the interest rate charged on personal loans. The current loan rate ranges between 3% to 12% depending upon the lenders. But there is a high risk of losing a house if the borrower cannot pay back the loan amount.

Home Equity Lines of Credit or HELOCs

This loan is like a credit card but uses the home as collateral. Under this, the maximum amount of credit is extended to the borrowers. During rising rates, the interest rate on outstanding loans will also rise.

On an average, the interest rates on HELOCs range from 3% to 5% pa. It would be best to get the best interest rate if you had a high credit score and a low debt to income ratio.

Small Business Loans

This form of credit is available through banks or Small Business Administration (SBA). The loan is granted only after the business owner submits a formal business plan for review. The amount is supposed to be paid back from the tenure of 5 years to 25 years. Moreover, the interest rate charges on these loans are sometimes negotiable. The interest rate on business loans start from 14.99% per annum onwards.

Various digital lending apps offer loans quickly and without any hassle to the users. TrueBalance is one such loan app that offers instant loans without collateral backup in return and accessible terms and conditions. They offer a loan of up to INR 50,000 at easy terms and conditions, and the monthly personal loan interest rates charged by them are 5-11.9%, which is relatively low compared to other online lending apps. A personal loan is the best loan for those who need to borrow a small amount of money and are sure that they can pay it back. With TrueBalance, the entire loan process is paperless. So for a loan, apply through the TrueBalance website without any delay!