If you’re confused between personal and small personal loans, think of the latter as a subset of the former. Simply put, small personal credit or loan is similar to personal finance, except that the loaned amount is lesser, and the tenure is shorter.
However, both personal and small personal finance are unsecured loans, meaning you don’t need to pledge any collateral while applying for them. All you need is a decent CIBIL score. This feature makes both these types of loans easily accessible, and they often help borrowers meet a variety of big and small expenses.
Additional Read: How to Apply for a Personal Loan in 5 Simple Steps?
Small personal finance vs personal loan: differences
Even though these two loan types have several shared features, as mentioned above, they also come with many differences that are worth mentioning. Here they are:
|Parameters||Small personal finance||Personal finance|
|Loan amount||Here, the total loan amount is usually lower than personal finance. Thus, the prefix ‘small’ before its name! The exact maximum amount for this type of loan can vary from lender to lender.||Personal finance comes with a significantly higher loan limit. Many people use it for big-ticket purchases like funding an entire wedding, higher education, renovating their property.|
|Interest rate||Since a small loan can range between thousands and a couple of lakhs of rupees, the lending stakes here remain lower than its counterpart. Therefore, the interest rates at which this loan is given are also lower.||Since this loan comes with high lending limits, which can run into several lakhs of rupees, depending on the lender, it usually comes at a slightly higher interest rate.|
|Tenure||Small personal finance is usually offered with a shorter tenure because the total loaned amount is less.||Personal finance typically comes with longer tenures, as the total repayment amount is bigger, which can take a few years to be comfortably repaid by the borrower.|
Common benefits of small personal finance and personal finance
Think of small personal finance as a mini version of personal finance. No wonder both of them have more commonalities than differences. These include:
- For starters, you can avail of these loans for any end purpose. Explaining the reason behind taking any of these loans to the lender is not a mandatory requirement.
- Opting and timely repaying the EMIs for these loans improves your credit score, and a decent CIBIL rating, in turn, helps you get loans in the future.
- Presently, these loans are available at affordable personal loan interest rate, making them a worthy option to help yourself out of any financial trouble.
Additional Read: Dos and don’ts for an instant personal loan in India
The bottom line
Are you looking for a quick and secure way to finance a pending expense? Then, depending on the total amount you require, apply for small personal finance at Tata Capital. With us, you can rest assured of some of the most affordable interest rates, flexible tenures, relaxed eligibility criteria, and a seamless online application process that provides speedy processing.
So, what are you waiting for? Check your potential EMIs with us by using a personal loan EMI calculator available on our website, and start your application today!