Individual Loan or Personal Loan: Which One is Right for You?

Individual loan and personal loan are unsecured loans where you don’t have to pledge collateral to avail a loan. However, bot are designed to serve different purposes. Also, there are quite a few difference between the two in terms of eligibility and other parameters. We have decoded these financing options so that you can make an informed choice. Let’s dive in!

What is an Individual Loan?

An Individual Loan is a purpose-based loan, meaning you can use the loan amount for business expansion, home refurbishment, animal husbandry and agricultural activities. You can get a loan amount of up to ₹3 lakh. It’s an unsecured loan. For instance, if you take a home loan, you have to pledge your home to the bank. The bank holds partial ownership rights of the house till the home is repaid. Such is not the case for individual loans; you don’t have to pledge collateral to avail a loan.

What is a Personal Loan? 

A personal loan is also an unsecured loan, however, it’s not purpose-based. You can use the loan amount for any requirement, like paying medical bills, financing a wedding, buying gadgets, etc. That said, personal loans can come with higher interest rates if your credit score is poor.

Now, let’s take a glimpse of the difference between personal loan and individual loan.

Individual Loan vs Personal Loan: A Comparative Analysis