HIghlight: Here is all you need to know about getting a personal loan application approved without any security. Read on to learn more.
Can one get a personal loan without security? Yes, personal loans are granted without collateral or security.
Availability of a personal loan is quick and easy. After submitting the personal loan application, the loan approval and disbursement are carried out quickly. How to utilize the loan amount is altogether dependent upon the applicant. They can use it for several reasons, like for –
- Business needs
- Luxury/abroad travel
- Higher education
- Personal purchases
- Health-related crisis
- Home renovation
A bank or a lending institution gives a personal loan. Personal loans are offered to subsidize a financial need or immediate money prerequisite. Be it for business, family weddings, or any other financial emergencies; personal loans have the power to save the situation. When one submits their loan application, the bank or the lender won’t examine you concerning the end-use.
The most convenient feature of this kind of loan is that it does not ask for security or collateral. The borrower does not need to put in any documents or gold as a security guarantee for the loan. Therefore, personal loans are more accessible than other kinds of loans.
To qualify for personal loans without security, certain aspects are considered. They are-
- Credit Rating/ Score
- Credit Worthiness
Generally, the credit score of the applicant is assessed. Credit scores determine the creditworthiness of the applicant. A desirable credit score is seven hundred and fifty or above.
A good credit rating and history show that the applicant is responsible for repaying the loan or credit.
When one has a steady history of loan/ credit repayments and a high credit rating/ worthiness, the chances of getting a personal loan are higher.
Other than the credit qualifications, the following is a general list of eligibility criteria for personal loans without security-
- The applicant should be an Indian citizen.
- The desirable applicant’s age is between twenty and sixty years.
- The applicant should be either employed in a sector or self-employed.
In the cases of availing personal loans from banks, it helps when one is an existing client. Existing clients have higher chances of getting their loan applications quickly approved.
Personal loans are considered unsecured loans. It is because they are offered without any guarantee or security. Therefore, banks and lending institutions will check the applicants-
- Salary or income
- Flow of cash
- Soundness and steadiness in business or work (to ensure that the applicant can repay the loan advance)
Therefore, when putting in a personal loan application, it is advised to focus on monetary stability to ensure a smooth loan approval process.
To avail of a personal loan from a bank, the applicant can visit the bank and fill out the application. Some banks also have the option to apply for a personal loan on their official websites.
The following is a general list of documents that have to be submitted to banks for personal loan approval-
- Proof of age, address, and identity
- Passport size pictures of the applicant
- Duly filled loan application
- Proof of income – salary slips and the likes.
Another way to avail a personal loan is through online lending portals and applications. The applicant has to –
- Download the lender’s application or visit their website.
- Login and fill the loan application. It generally includes the personal details of the applicant along with the loan details.
- Submit KYC documents like the Aadhaar card, PAN card, etc.
When the loan is approved, the amount is directly transferred to the borrower’s bank account.
The below are two commonly asked questions with answers regarding personal loans without security-
- Does a personal loan without security/ collateral accompany higher financing costs?
Personal loans are not known to ask for any guarantees. The accompanying financing costs like the interest rates of the loan are dependent on certain aspects, like-
Credit profile and history
Required loan amount
Income proofs and history
When such aspects are strong, one can expect to avail the loan under favorable financial terms.
- How does the loan repayment process of personal loans without collateral work?
Personal loans are usually taken for short or medium tenure periods. Their loan term can range from twelve months to sixty months. They require equated monthly installments (EMIs) like any other type of loan.
One can adjust these monthly payments to ensure that they are more pocket-accommodating. The loan repayment process is also very similar to other types of loans.
However, it is advised to check the terms and conditions of the loan repayment process before proceeding with it, as personal loans might differ on the foreclosure terms or charges.
Personal loans, in general, are transferred within a short period after getting approval. All it requires is a decent credit profile. Many online platforms provide personal loans with minimal documentation. With the rapid advancement in the digital age, many borrowers are showing interest in these online platforms.
A personal loan without security is not only possible but is also easy to get. Personal loans have several benefits that follow them. Some of them are-
- Easy personal loan application process
- Flexible loan repayment tenure
- No end-usage restrictions (loan amount can be used for different purposes)
- Quicker approval and disbursal processes
With the online lending platforms, one need not even step out of the comforts of their home to apply for a personal loan. They provide a window to access money quickly during urgent financial emergencies/situations. They approve loans and transfer the amount to the bank account on the same day.
In short, personal loans are simply a click away with an easy and convenient application process.
Now that you’ve grasped how unsecured personal loans work, apply one now and move a step closer to realizing your dreams that were otherwise unattainable owing to lack of funds. Apply for a personal loan today!
Download the personal loan app here, or simply log in to our website and be a part of the #OneSmallStep experience.