Unsecured loans are those for which you don’t need to pledge any collateral to your lender. One of the best examples of unsecured loans is personal loans.
Personal loans are availed widely to meet many needs without usage restrictions. But have you ever wondered the reasons behind availing an unsecured personal loan? Let’s find out in this quick post!
- It lets you borrow a large loan amount
One of the key reasons why plenty of borrowers go for unsecured loans such as a personal loan is because of the higher amount involved. Most of the leading banks and NBFCs in India offer a large loan amount. If you are the right candidate with a sound cibil score, repayment and employment record, then you can get that. A loan amount of up to Rs.25 lakh is offered by renowned lenders. When you get such a large amount of money, then you can use it to meet your many needs without restrictions.
- It is used for so many reasons
You can get an online personal loan and use the loan amount for so many needs. And that makes it an evergreen and universal financial solution. The most obvious reasons that borrowers go for personal loans are:
- Debt consolidation
- Upcoming wedding in the family
- Business expansion
- Buying a new or used car
- Going on a vacation
- Medical emergencies and more
- It is given without any collateral
Applying for unsecured loans means that you don’t need to submit any collateral. It is given on the basis of your creditworthiness. It is measured by your cibil score, repayment and employment history. You can check personal loan eligibility by using the eligibility calculator on a lender’s website instantly. This way, you can know about an exact amount that a creditor can sanction if you apply.
- The loan approval time is not long
If you have the needed personal loan eligibility, then you can have the approval for unsecured loans instantly. It can save you from lengthy approval procedures, and you can be sure to get the loan money in a flash.
- You can get the loan money in your bank account in 24 hours
Once you get the loan approval, your lender disburses the approved loan amount in your bank account within 24 hours. This way, you can start managing your financial requirements quickly and don’t need to wait for funds for ages.
- It lets you repay over a flexible repayment tenure
Most of the unsecured loans come with a flexible repayment tenure. For example, reputed lenders let you repay the personal loan within a tenure of 60 months. It helps you use the tenure to pay smaller EMIs and manage your monthly outlays smartly. What’s more, with a small amount to repay each month, the chances of default are also less.
Lenders charge a bit higher rate of interest on personal loan as there are no collaterals involved, and the risk of losing money is more.
But borrowers with a higher credit score and a better repayment and employment record don’t need to worry. Their higher creditworthiness can help them enjoy a lower rate than others.
If you are looking for some urgent funds, then there is nothing more suitable than personal loans in today’s time.