What Are the Benefits Of An Unsecured Loan?

An unsecured loan like a personal loan is a popular credit option which extends financial assistance to borrowers without requiring any collateral. The same has encouraged more individuals to avail an unsecured loan to easily finance their monetary requirements. As per RBI, in June 2018 the outstanding debt of personal loan stood at Rs.19.33 lakh crore. It was also noted that individuals who belonged to the age group of 25 years to 45 years accounted for a major share of it.

The following highlights the major benefits of an unsecured loan in details -

• No collateral – When compared to most credit options, a borrower does not have to pledge any asset as collateral or security to avail an unsecured loan. Individuals do not have to run from post to pillar to find a suitable guarantor to avail such a loan. This feature is a major benefit of a personal loan and makes it a feasible option for financial assistance at a short notice.

• Zero restriction on end-use – Unlike most secured loans like home loans or loans against property, an unsecured personal loan comes with zero restrictions on end-use. Borrowers can use such a loan to finance a number of financial requirements ranging from debt consolidation, to meeting medical expenses or travel expenses, etc.

• Flexible tenor – Most financial institutions extend unsecured loans that come with a flexible tenor of up to 5 years. Such a flexible tenor helps borrowers to choose a tenor that suits their repayment capability and allows them to repay their debt as per their convenience.

• Easy documentation process – Individuals can avail an unsecured loan from financial institutions on fulfilling basic eligibility criteria and submitting requisite documentation. The feature of online application has further simplified the process of documentation. Regardless, individuals must learn how to apply for personal loan to be better equipped with the procedure.

• Substantial loan amount – Depending on the age, financial standing and credit history, an applicant can avail a substantial amount of money as an unsecured loan. Applicants can avail a personal loan of up to Rs.25 lakh and meet their financial requirements with much ease.

• Easy repayment option – Unsecured loans tend to come with an easy repayment option to help borrowers repay their debt easily and on-time. By learning how they can use personal loan EMI calculator, individuals would be able to make the most of their finances and would be able to plan their loan repayment accordingly.

• Instant disbursal – Most lending institutions allow individuals to apply for an unsecured loan online. Besides making the application and verification process quick and simple, it also quickens approval. Once the loan application is approved, it generally takes less than 2 days for leading lenders to disburse the loan amount.

Other than these, several financial institutions like Bajaj Finserv also extend unsecured loans such as personal loans that come with simple eligibility criteria, easy loan approval and zero hidden charges.

They also provide pre-approved offers that make availing loans seem easy and hassle-free. These offers are available on several financial products like home loans, personal loans and business loans. Check your pre-approved offer by providing basic information like name and contact number.

The features and benefits of an unsecured loan serve as parameters for weighing its effectiveness as a credit option. Regardless, intending applicants should also lay due importance to the terms and conditions that accompany such benefits. Also, they should be careful while choosing a suitable lending institution to avail the required financial assistance without being subjected to a lot of hassles.

Read Also: Unsecured Loans: What Are They And How To Get One?