If you are planning for a trip or wish to buy an apartment, the best way to fulfill your dreams is through a personal loan. Personal loans online can be of two types- secured and unsecured personal loan. There can be many benefits of availing an unsecured loan.
In an unsecured loan, no security in terms of property or any other asset is required to be pledged by a borrower. Therefore, unlike the secured loans, it assures no cash conversion to the lenders in case the borrower fails repaying the loan amount. But, the lender will sue you in case you fail repaying. There can be two types of an unsecured personal loan–
- Revolving unsecured personal loan– These personal loans online act like credit cards which can be availed, paid back, and can be spent again.
- Term unsecured personal loan-These personal loans online are provided for a specific duration with a set sum of amount. These loans are available for students also.
For availing a personal loan, you have to provide a specific reason for availing the loan. It can be for any genuine reason; no questions will be asked. As an unsecured personal loan is provided without any collateral, the lender would examine every available detail including your income status, credit history and other such information to check if you are capable repaying the loan.
Still confused about whether to avail an unsecured personal loan? You can refer to the following benefits before making your decision.
5 benefits of taking an unsecured personal loan–
Less time for approval of a loan-
If you apply for a personal loan online with a mortgage, you would notice that the process is not a simple one and it will take quite a bit of time for the approval process to complete. But, with an unsecured personal loan, the approval process is comparatively less time consuming since you do not have to give any collateral. As a result, the loan gets approved and disbursed much quicker. If you have an absolute urgency to access funds, an unsecured personal loan is a way out for you.
You can get an exact idea of your debt-
An unsecured personal loan doesn’t hide any details from you. This personal loan online gives you an accurate idea of the amount you have to pay back and the period of your repayment. Most unsecured loans are offered for a period of two to five years. As the interest rates are pre-fixed and the interest amount depends on your loan amount, you won’t get any shock or surprises when you have to pay your loan EMI every month.
Improving your credit score-
If you want to improve upon your existing credit score, you can opt for an unsecured personal loan to pay off your credit card amount. This will result in the reduction of the credit utilization ratio and, in turn, will contribute tod.
More privilege in using the loan amount-
You can use your personal loan online amount pretty much for any genuine reason. The unsecured personal loan gives you the freedom to use your money according to your wishes. Whereas secured loans are only offered for specific reasons for its use. Unsecured loans are generally offered with low interest rates than your credit card. This makes unsecured loans more popular among customers.
5. Fewer possibilities of default-
It is always better not to go for a personal loan online if there is any chance of your default. However, unsecured loans come with few default consequences if you fail repaying the loan. In secured loans, there are possibilities where you might lose your mortgage if you fail repaying your loan. Since you do not have to provide any mortgage for an unsecured personal loan, you are at less risk as a borrower. The lender doesn’t have anything which can be taken away from you. It’s another matter that, they might sue you for not repaying the loan amount on time.
Where do you get an unsecured personal loan in India?
Listed below are few top banks/financial institutions in India that can lend you an unsecured personal loan.
- ICICI Bank-
ICICI Bank personal loan with low rates of interest in the range of 11.25 % to 17.99% per annum. You can get a personal loan online for a maximum amount of Rs 20 lakhs. The loan comes with a processing fee of up to 2.25%, and you can avail it for a maximum tenure of 5 years.
- Yes Bank-
The unsecured personal loan amount provided by Yes Bank varies between Rs 1 lakh to Rs 40 lakhs for self-employed and salaried individuals. The interest rates for this personal loan start from 10.75%. You also have to give a processing fee for this personal loan online, which can go up to 2.5% of the amount approved. This bank offers you the benefit of transferring an existing loan from another lender with a higher rate of interest to Yes Bank. You also get a speedy approval of your loan application.
- HDFC Bank-
Another unsecured personal loan offered by HDFC bank comes with an interest rate that varies from 15.50% to 21.50% p.a. You can apply for this personal loan online for any amount from Rs 50000 to Rs 15 lakhs, depending upon your requirement. You may add the income of your spouse and can apply for a joint loan if you need bigger loan amount. Excluding the applicable taxes, you also have to bear a processing fee in the range of 1% to 2.5 % of the approved loan amount. You can also get an option of insurance coverage with unsecured personal loans from this bank.
- Axis Bank
Axis bank provides unsecured personal loan schemes to customers at varying interest rates, depending on their income, credit profile, bargaining power, etc. The interest rate of axis bank personal loan is currently in the range of 15.75 % to 24 % for the salaried and self-employed class.
This personal loan online has a processing fee in the range of 1.5% to 2%. You do not have to pay any extra charge for pre-closure of your Axis personal loan. It also offers a flexible repayment period from 12 months to 60 months. Also, the entire loan procedure is a completely transparent one. It has zero hidden charges.
We have seen that an unsecured personal loan comes with quite a few advantages. You can get a loan quite quickly without following any strict rules and regulations for approval. You can obtain this type of personal loan online to cover a wide range of expenses like improving your house, emergency medical expenses, for enjoying a vacation, etc. On the flip side, an unsecured personal loan can come with higher interest rates at times and such loans can put you into the habit of taking a debt now and then as they are easier to avail. So, it is better to choose such loans carefully and wisely.
Apply for your personal loan online through the efficient platform of Afinoz. The experienced professionals at Afinoz will help you with equitable comparison insights and the best in class support throughout so that you can get the best unsecured personal loan to suit your affordability. Moreover, you can avail all services from Afinoz, absolutely free of cost.