A Definitive Guide To Unsecured Loans

When you look to take an unsecured loan, you need to be aware of the ways in which such loans work. While unsecured loans are very safe and easy to get, understanding the way in which they work makes it easier for you to get more value out of them. Take a look at this loan guide to know more about the unsecured loans, how they work and how you can benefit from opting for such a loan.

Features and benefits of unsecured loans

1.    No collateral - 
One of the most important features of the unsecured loans is that it doesn't ask for collateral. This is a major benefit as anyone can get a loan. Many a time, people fail to get secured loans because they do not have anything to pledge as collateral. This does not happen in an unsecured loan and as a result, you can have access to urgent funds when you need them for an emergency. 

2.    Instant approval - 
A very tedious part about any type of loan is the waiting period you have to go through just to know whether or not the loan is approved. The lender scrutinises your application, your credit score and your documents and then takes a decision or whether or not the loan would be given to you. This process takes time and you have to wait endlessly. However, when you opt for an instant digital personal loan, which is an unsecured loan, the approval is given instantly. You get to know the status of your application in just about 10 minutes. This is highly beneficial as you save your time and effort and get a lot of mental peace as well.

3.    Less paperwork - 
The documentation process is minimal. You just need to submit a few documents such as your PAN and Aadhaar card, along with some financial statements. You do not need hard copies. Simply clicking photos with your mobile camera and uploading them is enough. This saves a lot of time and effort as you do not need to take out photocopies, get them attested, etc. The simple documentation process makes it very simple and easy for you to get the unsecured loans instantly and in a quick manner.

4.    Quick disbursal - 
With less paperwork and instant approvals, the unsecured loans are ready for disbursal in just a few hours. This makes it easy for you to have the funds quickly when there is a serious emergency. The best fintech companies process the loans and transfer the loan amount in your bank account in as less as 24 hours from the time the loan is approved.

5.    Flexible repayment term - 
The next benefit you get is that you can repay the loan on a term that is convenient for you. If you are financially capable, opt for larger EMIs and repay the loan at a quick pace. If however, you feel you can’t afford large EMIs, opt for smaller EMIs over a longer tenure. The leaders offer a lot of flexibility in repayment and that makes the unsecured loans even better to have.
 

6.    Importance of credit score - 
The credit score plays a tremendously important role in unsecured loans. A person who has a high credit score is seen as a financially responsible person. He is therefore given the loan at a lower rate of interest as the lender sees him as a less risky borrower. Conversely, a person with a poor credit score would have to pay a higher rate of interest on the unsecured loan. The lender may even reject the loan application if the credit score of the applicant is too low.

7.    Importance of salary and employment - 
Another important point to remember is that when the lender offers an unsecured loan, the employment and salary profile of the borrower is closely checked. Unsecured loans are preferably given to salaried individuals who earn a stable and steady income each month. Such people are more likely to be able to afford the EMIs and clear the loan on time. People who are unemployed or do not have a steady income may find it more difficult to get an unsecured loan because of this reason. 

Applying for an unsecured loan

It is very simple to apply for an unsecured loan. All you have to do is visit the website or app of your preferred digital loan provider. Enter your personal details and also the details about your loan such as the volume and the repayment tenure. You will also have to enter your PAN number and with the help of that, the lender will evaluate the credit score. If found suitable, the loan will be approved in just a few minutes and you will receive the loan amount in just a day. The process is actually this simple and allows you to have the perfect loan in a completely hassle-free manner.