Finance management should be a top priority when you want to achieve a particular life goal. Many people advise regular savings to accumulate funds for any emergency. But sometimes, hard-earned money may also fall short of any urgent requirement.
In such a situation, anyone can get money only through loans. An unsecured or secured personal loan is one such option. Here, in this article, we are going to explain unsecured personal loans, their advantages, and the complete application process for personal loans.
What is an Unsecured personal loan?
Unsecured personal loan applications do not need any valuable security. Lenders usually approve the loan based on your credit score and income. In contrast to other types of loans against valuables or property, an unsecured personal loan is easier. It requires minimal documentation and verification time.
These days people prefer to apply for unsecured personal loans due to their benefits. There can be multiple reasons, such as marriage expenses, a child’s higher education, or a medical emergency, where you may need quick funds. Here is when unsecured loans come into use.
Advantages of an Unsecured Personal Loan
Before applying for an unsecured personal loan, you should first know the eligibility criteria to apply for the loan. Applicants need to fulfil the application criteria to qualify for the application. However, after qualifying for a loan, you can avail of it easily. Some benefits of unsecured personal loans include:
Application flexibility is the major factor of unsecured personal loans. Loan applicants do not need to disclose the purpose for which the loan is applied. You can use the loan amount as per your choice. However, you are advised to borrow only when you need the money.
- Collateral Free Loan
Many people do not know whether a personal loan is secured or unsecured. However, one should know that personal loans are unsecured forms of loans. Moreover, if personal loan applicants have a poor credit history or insufficient income, then to be eligible for the loan, they may have to use their personal assets as security for loan approval.
- Flexible Repayment Tenure
Most personal loans come with short-term repayment terms. The loan repayment term may vary from 12 to 60 months, depending on the financing institution. However, some financial institutes are flexible for repayment tenure. You can choose the appropriate repayment schedule and tenure depending on your income and budget. However, whenever you sign the loan agreement, always read the loan foreclosure terms and conditions carefully.
- Less Documentation
You might be asked to submit basic documents such as income proof, KYC documents like ID proof, passport size photograph, and others. Once the lender executes the verification process, the loan gets approved instantly.
These benefits make personal unsecured loans easy to avail. However, if you want to know what exact documents are required to apply for the loan and the common eligibility criteria to apply for the loan, keep reading.
Eligibility Criteria for Unsecured personal loan
You may apply for an unsecured personal loan from anywhere. Almost all financial institutions have the same standard eligibility criteria. Mostly the application is decided based on age criteria.
- Only Indian nationals can apply for unsecured personal loans.
- The applicant’s age should be between 21 and 58 years.
- Minimum and maximum age limits may differ from one lending financial institution to another.
- Any self-employed or salaried individual with a minimum salary of Rs. 15,000 may apply for an unsecured personal loan.
- Anyone with the same high-income range can apply for the loan.
- If you are self-employed or have a business, then it should be at least 2 years old.
- The salaried person should be with their organisation for at least 6 months.
Hence, anyone with all of these satisfying criteria can apply for an unsecured personal loan.
How to Apply for an Unsecured Personal Loan Online and Offline?
You may reach out to your nearest financial institution or bank to apply for an unsecured personal loan. You can apply in person and online through both modes. The websites have the option to apply for loans that may be accessed online. The steps for offline or in-person and online loan applications are:
In-Person/Offline Loan Application Steps
- Visit your nearest and preferred bank branch or financial institution outlet.
- Ask for the application form and fill required details.
- Submit the form with the necessary documents to validate your information.
- A bank representative will verify your documents and eligibility criteria and prepare your loan offer as per your eligibility.
- Once the financial institution verifies and approves your details filled in the application form, they will disburse the loan amount to your bank account
Online Loan Application Steps
- You can apply for a loan on a financial institution’s website.
- On the website, go to the relevant loan application web page and open and fill in the application form.
- Upload the required documents and wait for approval.
You can apply for the loan via any mode. The requirement remains the same.
A personal loan is a one-stop shop for any loan requirement. There are many more loan types and categories. You should make sure of important factors like quick loan sanction and disbursal. While applying for an unsecured personal loan, you should also check for closure and prepayment terms.
It is always recommended to check the lender’s credibility. You should also check the RBI registration status and the lender’s disclosure standard.
Customers or borrowers with high credit scores always get the loan easily. However, they should also fulfil the minimum KYC requirement as well. With the help of proper guidance and information, anyone can get a loan. For more blogs related to personal loans and other financial aspects, visit Piramal Finance here.