A Personal Loan doesn’t need to be used for only one thing. You can use it for debt consolidation, home upgrades, or a major purchase. Unsecured Personal Loans are loans that do not need to be backed by collateral. Finance companies are willing to provide more attractive interest rates when you appear as a creditworthy borrower.
When looking for an unsecured Personal Loan, there are a few key things you’ll need to keep in mind. This article will cover what you need to do to get unsecured Personal Loans quickly. We’ll also touch on some of the benefits and drawbacks of these loans so that you can make a sound decision.
Unsecured Personal Loan – Advantages
There are several reasons why unsecured Personal Loans are a good option in India:
- You may use them for anything: paying off debt, making a significant purchase, or medical emergencies.
- Unlike secured loans, borrowers of unsecured loans aren’t required to pledge valuable possessions as security against their debt.
- You may choose the repayment term that best suits your needs with an unsecured Personal Loan. There are loans with periods of only a few months and loans with terms measured in years. For instance, Clix Capital provides loans with a tenure ranging from 12 to 48 months.
Unsecured Personal Loan – Eligibility Criteria
Finance companies consider various factors while assessing the eligibility of salaried employees for an unsecured Personal Loan. Some of the key criteria has been listed below.
Your credit score is key in determining if you are eligible for an unsecured Personal Loan.
A good credit score reflects that you have managed your finances well and would continue to do so in the future. In contrast, a low score may indicate that you are a high-risk applicant, and, as a result, the lender may reject your loan application.
Income and Employment Stability
Finance companies will also assess your monthly income and employment stability to determine your eligibility for personal loan. A minimum income of ₹20,000 per month will get you approved for an unsecured Personal Loan at NBFCs like Clix Capital.
Debt-to-income ratio is another thing that finance companies will check to assess your ability to repay an unsecured Personal Loan. A high ratio would indicate that you are already struggling to repay your existing debts and may not be able to repay or manage another loan. So, keep a low debt-to-income ratio.
Things to Check Before Unsecured Personal Loan Application
When looking for an unsecured Personal Loan, there are a few things you’ll need to do to get loan approval. We have discussed them below.
- Check your credit score: Finance companies will typically check your credit score to see if you’re a good candidate for an unsecured loan. If your score is low, it won’t be easy to get approval for your application. Check your score and take corrective measures, if necessary, before you apply for a loan.
- Shop around: Don’t just go with the first loan product you find. Compare rates and terms from a few financial products to ensure you get the best deal.
- Read the fine print: Before you sign on the dotted line, ensure you understand all the terms regarding the loan agreement. There may be hidden fees or other things you don’t know.
- Ensure to make payments on time: Once the loan is approved, making your payments on time each month is essential. Missing a single payment could affect your credit score negatively and make it harder to get approval for future loans.
Unsecured Personal Loan Online Application: Step-By-Step Process
When you need surplus cash and don’t have any collateral to secure a loan, then an unsecured Personal Loan is the ideal option. Before you apply for a personal loan, it’s essential to understand the process. Here is a step-by-step guide you can follow when applying for an unsecured Personal Loan online.
- Research and compare rates for different loan providers to ensure you get the best deal on your loan.
- Once you’ve found a Personal Loan that you’re comfortable with, fill out the online application form.
- Be sure to provide all required information accurately and completely. If you make any mistakes, it could delay the processing of your loan or even result in your application being denied.
- Once your application has been submitted, the NBFC will review it and decide on whether or not to approve your loan. If approved, you’ll typically receive the funds within a day.
Essential Things to Consider Before Taking an Unsecured Personal Loan
There are a few things to remember before taking an unsecured Personal Loan. Here are a few of the most crucial things to consider.
- Knowing how much you need to borrow upfront is essential.
- Your credit score plays a key role in determining whether or not you qualify for an unsecured Personal Loan and what interest rate you’ll be charged.
- Be sure to carefully consider your budget before taking out an unsecured Personal Loan. You’ll be responsible for making monthly payments, so make sure you can afford them.
- Unsecured Personal Loans typically have repayment periods ranging from a few months to 5 years.
Knowing where to seek and what to look for is the secret to get an unsecured Personal Loan quickly. Remember, you’ll need to pay off the loan, so be sure you’re comfortable with the repayment schedule. Good luck!