Conventionally, there are two types of loans available in India, secured and unsecured. However, in case of emergency financial requirements, unsecured loans are often the most viable financing solutions. Lenders offer unsecure advances loans such as personal loans only to eligible borrowers. Unsecured credits are popular as they do not require any collateral. Nonetheless, there are different types of unsecured loans available in India.
Since such a loan can be availed of without mortgaging any collateral, the risk of asset loss is eliminated. However, due to lack of assets, applicants need to undergo a stringent eligibility check before loan approval. Factors such as a good past relationship with the lender, an excellent credit score and a great repayment history certainly increase the chances to avail of this loan.
Following are the most popular unsecured loans available in the market.
It is the most popular unsecured loan in India, known for offering instant funds. Since this loan is unsecured, the interest rates are usually on the higher side. However, with a stable income source and a good credit score, enjoy competitive interest rates on this credit without much hassle.
Additionally, a personal loan does not entail end-use restrictions and therefore can be used for various purposes. These include -
As the name suggests, this fund is solely offered to established businesses. To avail of this fund, applicants need not keep collateral with the lender. Eligible borrowers can avail of the funds and utilise the same exclusively to meet business expenses.
Note that both these types of unsecured loans come with the term loan and flexi loan facilities. Individuals can withdraw funds as and when required with a Bajaj Finserv Flexi Loan from a pre-approved credit limit. Borrowers can pay interest only on the funds utilised and not on the total loan sanctioned.
Besides being bifurcated as per who can avail the advance, an unsecured personal loan can be classified on the basis of how it can be used.
A personal loan is also available under different names based on its purpose -