Lenders sanction a secured loan when you pledge an asset as collateral, which acts as a security.
For eg: You can pledge your house, plot, gold, vehicle, securities, fixed deposits, etc. as collateral.
However, if you default on a secured loan, your lender can seize and liquidate the asset in order to recover the outstanding debt.
Types of secured loans include mortgage loan, gold loan, loan against fixed deposits, vehicle loan and loan against securities.
Unsecured loans do not require you to pledge any collateral or find a guarantor. Lenders scrutinize your credit score to ensure that you have a good repayment history. Applicants need to maintain a credit score of 750 and above in order to avail an unsecured loan easily.
In case of a default, the credit report of the customer will be adversely affected.
The two types of popular unsecured loans include:
1. Personal loan
2. Business loan
To apply for a Bajaj Finserv Personal Loan, simply fill in your details, select the loan amount and tenor that suits you, submit the relevant documents and get the money in your bank account within 24 hours.