There are times when we need to borrow money to either cover expenses that keep piling up or to finance new plans like buying a vehicle, refurbishing your home, going on a trip abroad, or in the case of any emergency. The only other options that people have in these cases is to deplete their savings, but it's not advisable as savings are meant to be preserved for uncertain times. Hence, unsecured personal loan emerges as the safest bet to meet the current financial needs without touching savings or cost-cutting on the planned investments. What makes unsecured personal loans appealing is that they aren't based on any collateral, but simply your past credit record and your repayment capacity. Some of the reasons why unsecured personal loan is popular are:
Unlike any other loan, the only criterion to get a personal loan is the credit track record or CIBIL score and ability to repay. If you are a trusted customer of the bank, you can avail personal loan smoothly without much documentation. While banks look for CIBIL score while granting a personal loan, it doesn’t mean that it’s barred to those with low CIBIL scores. With so many lenders in the market and fierce competition, even customers with low CIBIL scores can avail unsecured personal loan, just that they won’t be entitled to other perks like highly flexible repayment options that are usually reserved for customers with high scores. But that’s still a lot better for those with an already pending loan, or those in immediate need of finance.
There was a time when a lot of people availed loans as a last resort only because of the extensive to-and-fro paperwork and other time-consuming formalities involved. Also, it took months before the loan got cleared, if it did. But personal loans have been quite a game-changer in this regard. The paperwork required is negligible and the amount is disbursed within 24 hours. This is one of the reasons why those who need money immediately prefer unsecured personal loan over any other loan options. There’s nothing like wait-time or other lengthy procedures. The process is smooth, fast and customer-friendly.
One of most important things that people look up while availing loans are the terms of repayment. Banks and NBFCs (Non-Banking Financial Corporations) usually offer very flexible repayment options so that the customer doesn’t feel overburdened at all. The amount can be borrowed anytime and there are also options of partial repayment without incurring any penalty.
Personal loan interest rate varies depending on the profile of the borrower. Personal loan interest rates are higher than secured loans, but lower than credit card interest rates. Those with good CIBIL scores can get lower than normal interest rates. For those who already have an EMI on a credit card or any other pending loan, personal loan interest rate can get lower.
While there are a lot of requirements in order to qualify for a normal loan, all that’s needed for an unsecured personal loan is just a proof of age, employment status, monthly salary and credit history. The ceiling on monthly salary is also lower than other loans and other personal loan eligibility conditions have also been kept minimal so that more and more people can apply without having any doubts.
Collecting all the necessary documents, getting them photo copied, submitting them and then getting to know that some document is missing and starting all over again, is not only time-consuming but can also get frustrating. Personal loans require bare minimum documentation. Nothing other than salary slips, KYC documents, employee ID proof and bank statements for a past few months are required. The process is as smooth as it can get.
Just like the options of repayment, there's a high degree of flexibility in the loan tenure, ranging from 1-5 years. Be it personal loan eligibility, or how much time you want to take to repay the loan, there are multiple options available.
Due to factors like low interest rate, fast approval, swift disbursal, minimum documentation, negligible paperwork and flexible repayment options, unsecured personal loan is highly popular. Personal loan eligibility criterion is such that it allows the maximum number of people to apply. That's another reason for its enduring popularity. Personal loan interest rate is lowest among all financing options. If you need a personal loan for any of your requirements, on Finserv MARKETS, you can get some amazing schemes with flexible repayment options.