Unsecured Personal Loan Eligibility

By: Joanne Clive

Unsecured personal loans cater to urgent day-to-day financial requirements, and have become very popular and common among the people. It is one of the finest, instant financial solutions for those who are hesitant to offer their property as security, and also for those who have nothing significant to offer. Basically, anyone who needs fast cash can acquire unsecured funds.

It is good to understand the reasons that make unsecured personal loans such a favourite in the credit market. As the name suggests, an unsecured personal loan can be availed to meet urgent short-term personal needs without pledging any collateral. In case of non-repayment, the risk of one's collateral being seized is not there. The only thing that a lender can do against a defaulter is, take legal action. Hence, it is called a 'risk-free' transaction. But, because the risks are not involved, borrowers should not go over board. It has also been termed as a 'hassle-free' loan option, as the conventional official procedures and formalities associated with borrowing are minimum. The loan processing time is much lower, as there's no property to evaluate. Therefore, the turn around time is much lower, i.e., trouble-free credit checks and quick approval.

A good credit rating is always a major prerequisite for securing any loan. Unsecured personal loan is no different. With a bad credit rating, it is very difficult to get a loan approved. However, even if one manages to get an approval, the interest rate will be much higher than the normal loans, and the repayment terms and conditions will be very strict. The chances of negotiating the rates and terms and conditions are nil.

An unsecured personal loans permits a borrower immediate access to cash by just filling a simple demand form. It is usually favoured to pay off credit card or store card bills, meet urgent medical or social requirements, plan a holiday or home repairs, purchase a vehicle and much more. For short-term credit requirements, an unsecured personal loan can be a boon. However, as always, a borrower should first assess, plan and then opt for it.

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