How to Get a Personal Loan Without Collateral?
As they say, everything in life comes at a cost. The same goes for a loan, which often demands collateral as security, and so it is called a Secured Loan.
Secured loans require collateral/security from the borrower. After pledging the collateral, the borrower gets the loan sanctioned. The collateral ownership remains with the lender until the loan is paid off. If the borrower defaults, the lender can recover the loan using the collateral.
One of the common examples of a secured loan is the Housing Loan, in which the plot or real estate property is used as collateral. The title deeds of the house/plot remain with the lender until the housing loan is paid off. Once the loan is paid off, the ownership of the house/plot is transferred to the owner. With secured loans, lenders are at a lower level of risk. This is because they know that the loan costs can be recovered from the collateral in adverse cases.
Understanding the concept of collateral-free loans
A Personal Loan without collateral can help individuals to get emergency funds quickly. Usually, Personal Loans fall under the category of unsecured loans.
Unsecured loans or collateral-free Personal Loans do not require security from the borrower. So how do lenders judge the risk level without collateral while offering unsecured loans? Well, lending institutions evaluate the creditworthiness of an individual before providing them with a collateral-free loan. To check the creditworthiness of an individual, the lender looks at their credit score, credit history, and other things.
Since Personal Loans do not need collateral, lenders indulge in pre-loan assessment. During the pre-loan examination, lenders extract the loan applicant’s credit report. The interest rate for the Personal Loan is also decided based on the credit report. Therefore, a Personal Loan’s interest rate will increase for a borrower with a poor credit history.
How to acquire a collateral-free Personal Loan in 2022?
Financial institutions and NBFCs offer Personal Loans without collateral. However, traditional lenders are more inclined toward offering secured loans. Even if conventional lenders provide unsecured loans, they require individuals to stand in queues and wait for multiple days. For the same reason, people prefer digital lenders like Clix Capital to acquire collateral-free Personal Loans.
Such NBFCs have revolutionised the process of acquiring unsecured loans. With a digital lending platform, collateral-free loans can be acquired within a day. Borrowers must complete the Personal Loan application online and submit it for review. Once the loan application is reviewed, the borrower will receive approval from the NBFC.
Clix Capital is a reputed and reliable NBFC that offers quick Personal Loans online. One does not have to pledge any collateral for obtaining a Personal Loan from them. However, individuals need a minimum Experian credit score of 630 and stable employment to acquire a Personal Loan quickly. To apply for Personal Loan, visit their website, fill in the required details and get your loan sanctioned within minutes.
Eligibility requirements for a collateral-free Personal Loan online
Since a collateral-free loan does not require security, the borrower must fulfil some conditions. Failing to meet the eligibility criteria can result in the cancellation of the Personal Loan application. In addition, eligibility requirements can change from one loan provider to another. The generic eligibility requirements for collateral-free Personal Loans are as follows:
- The borrower should be between 21 and 58 years old to acquire a Personal Loan without security.
- Salaried borrowers should have an experience of at least six months with the current employer. Also, an overall working experience of at least a year is required for Personal Loans. Lenders must judge the borrower’s occupational stability before approving the loan.
- Borrowers should have a minimum monthly salary of INR 20,000 to get Personal Loans quickly without collateral.
Documents required to acquire a Personal Loan without security
Lenders ask for a few documents to offer collateral-free loans without hassles. The documents required for a Personal Loan without security are as follows:
- Salary slips for the past few cycles for salaried individuals.
- Self-employed applicants present their account statements.
- Address proof, ID proof, and other documents.
Personal Loans are the best considering there is no need for collateral. You need an Experian credit score of 630 to get a Personal Loan quickly from online lenders like Clix Capital. The online process allows you to skip the queues for getting a Personal Loan. So, go ahead and apply for a Personal Loan without security right away!
Read Also: Stock Trading: How To Get Started