Unsecured Loan

What Is an Unsecured Loan? Know the Advantages of Taking an Unsecured Loan

Unsecured loans are the credits for which financial institutions do not ask to pledge any security or collateral. These loans are availed by candidates who adhere to the prescribed eligibility criteria. Since one doesn’t have

Unsecured loans are the credits for which financial institutions do not ask to pledge any security or collateral. These loans are availed by candidates who adhere to the prescribed eligibility criteria. Since one doesn’t have to mortgage a valued property or possession, it is less risky from a borrower’s point of view. Moreover, the risk involved in lending unsecured personal loan is high from a lending institution’s perspective.

Therefore, one needs to meet a certain set of prescribed eligibility criteria as set by financial institutions. Generally, financial corporations seek certain eligibility criteria for unsecured loan applications –

  • Applicants should be between 23 years and 55 years of age.
  • A candidate must be a salaried employee of a private or public limited firm.
  • He/she must be a resident of India.
  • Salary withdrawn every month must be greater than the minimum amount fixed by lending institutions based on their location.

Subsequently, candidates meeting these personal loan eligibility criteria can be benefitted in their borrowing experience. Following are the benefits applicants can acquire with a personal loan –

  • Anyone can avail unsecured loans

With unsecured loans, there is no restriction in who can apply for it. Any individual fulfilling the eligibility criteria can opt for it, which makes unsecured personal loans very popular. However, candidates without having a stable source of income from employment in a private or public limited firm may not be granted favourable terms on online personal loans.

  • No potential risk for borrowers

Borrowers do not have to mortgage a property or possession as collateral to avail unsecured loans, unlike secured loans. Consequently, candidates do not have anything at stake that they can lose in case they fail to repay the amount. Defaults not only lead to confiscation of the mortgaged or pledged asset but also show as a substantial negative on an individual’s CIBIL score.

  • Easy application procedure

Unsecured personal loans are easy to access and require less time for processing. Some financial institutions can even process the loan amount within 24 hours. And the loan amount can be disbursed to your account in merely 48 hours.

Easy application procedures are supported further by the inculcation of pre-approved loan offers by NBFCs like Bajaj Finserv. These offers are available on multiple financial products like home loans, personal loans, business loans, etc. Check your pre-approved offer now by entering name and contact number in the required fields.

  • No end-use restriction

There is no restriction on the usage of personal loans or unsecured loans. One may use a personal loan to pay off their medical debt while another borrower may use it to meet wedding expenses and likewise. The borrower can use the unsecured personal loan amount for any such purposes and emergencies.

  • Option to choose a tenor

The tenor for such unsecured loans can extend up to 60 months, substantial for a credit applicant a wide range to choose from. Availability of this wide-range tenor can reduce your monthly financial burden as the estimated monthly instalments calculated will be less as well.

Unsecured loans are a risk-free alternative for every borrower as they do not have to provide any collateral or mortgage. However, one must meet the personal loan eligibility criteria conditions to avail the benefits that come along with it. Since candidates are allowed to use it for any of the financial needs, unsecured credits have become one of the popular most methods to meet a varied range of monetary reasons.

Prospective borrowers seeking ways to avail an unsecured loan are advised to maintain a CIBIL score around or above 750 to enjoy the most beneficial terms. Refer to leading lenders to avail such features on a personal loan other than just attractive rates of interest.