Unsecured Loan

I have compiled basic criterion followed by almost all banks in India and also listed documents required for taking loan from banks in India. Although there will be difference in case to case basis but this standard documents will cover more than 90% of documents required for applying loan from any bank in India. In certain cases one can take loan upto 7 crore as unsecured loans also by involving multiple banks, subject to sound financials.

This is a type of loan which is given without any collateral so therefore they are more difficult to get than a secured loan. Credit rating is also considered in it. Unsecured loan is a high risk product as borrower has no obligation or collateral so getting an unsecured loan is tough as rules are very strict and the interest rates are also higher for it. Personal loan is example of unsecured loan wherein you have no collateral against it.

Short term

Short term loans are taken for small amounts and for doing small things such as getting a personal loan to buy a laptop or furnishing your house. These are for small tenures and are granted faster as compared to long term loans. Paper work is also less and acts as a saviour in tough times (paying some personal debt, for higher education, marriage). The rate of interest is generally high in short term loans.

Key facts

An application for an unsecured loan is primarily based on your personal credit rating, financial status and the amount borrowed, and you are not required to offer your home as security for the loan. You are of course legally bound to pay back the loan as agreed

The top three reasons people take out an unsecured loan is to consolidate debts into one possibly less expensive loan, to carry out DIY projects at home or to purchase a car