Collateral free loans are the loans which do not require any asset or property to be kept as security with the lender. The rate of interest is usually higher for these loans as the lender is at risk if the borrower defaults in the repayment of the loan. Thus to price the risk factor they increase the rate of interest to cover for the lack of secured assets. However, with a good credit score and a decent relationship with the lender, one can negotiate for the best possible deal and offer with the lender.
Personal loans are the most sought after collateral-free or unsecured loans which are offered by most lenders. Different lenders have different their own pre-defined personal loan eligibility criteria complying to which is mandatory to get the loan application approved. One can compare top Banks and NBFCs for their offerings on collateral-free loans on LoansJagat platform which allows for quick loan application processing, approvals and disbursal. It is really simple to avail instant personal loan through the LoansJagat portal.
Personal loans offer financial aid in the need of the hour. They are less stringent in the eligibility and documentation requirements and are approved quickly. The lenders only take your basic KYC and financial information into consideration for approving the loan application. Also, the other great advantage of these loans is the fact they do not require any collateral (property or any asset) to be kept as a security against the loan. This means that even if you default, you won’t lose any of your precious assets. Also one can use the loan amount as per their jurisdiction and the lender holds no interest in the same. The loan amount can be used to finance vacations, weddings, home renovation projects, education, medical emergencies etc.
Read More: Essential Considering When Applying for a Personal Loan
Even though the personal loan eligibility criteria are not stringent, but one ought to comply with it to avoid getting their loan application rejected. The lender considers your financial information to be sure of your repayment capacity. Another key factor which the lenders seek is the credit score of the applicant. Credit score defines the credit history of the borrower and has details about his past repayments of loans. An excellent to good credit score can fetch you a collateral-free loan quickly. However, some lenders also offer personal loans to individuals having low CIBIL score as well, but in return charge a rate of interest that is more than the usual. On the other hand, applicants with a higher credit score may negotiate with the lender for a better deal and interest rate.
The eligibility criteria for collateral-free loans vary for every lender, However, we may consider the following as a general practice:
1: Applicant’s Age: The unsecured loans are offered to individuals who are aged between 21 to 60 years.
2: Nationality: The borrower must be an Indian citizen.
3: Employment status: The borrower must be either a salaried individual or self-employed individual.
4: Credit score: A credit score over 700 is considered good by the lenders.
Read More: Know the actual cost of your Personal loan
Eligibility criteria are taken very seriously by the lenders. It thus becomes imperative to comply with it throughout. Here are some key things to remember to improve your eligibility for collateral-free loans.
- Always check for the eligibility before you apply for the loan. Doing so helps you to avoid the chances of getting the loan application rejected.
- Use the loan eligibility criteria calculator to check for the loan amount you are eligible for. Avoid applying for an amount which doesn’t match with your financial credentials.
- Pay for your ongoing EMIs on time to maintain your credit score.
- Aim to limit the credit card overuse and thrive to keep the credit utilisation ratio under 30 % to enhance your credibility.
- Avoid applying for collateral-free loans with different lenders simultaneously.
- Avoid taking multiple loans at a time.
Another key thing is to compare different lenders for their eligibility criteria before finally choosing on the one. It may be possible that a lender is too stringent with his criteria while the other lender maybe a little flexible in their approach and may offer you a personal loan. LoansJagat, which is the leading online platform for personal loans is a proven benchmark for comparing different lenders on account of their offerings. One can apply directly from the online platform and leave all the hassle of getting the loan application approved to LoansJagat. LoansJagat undertakes the responsibility of your loan application process and stays in touch with you till the time loan amount is disbursed in your account.
Read More: How to reduce your personal loan rate of interest?