How To Avail a Personal Loan Without Collateral/ Security?

Highlight: Here is all you need to know about getting a personal loan application approved without any security. Read on to learn more.

Lending without collateral is becoming popular nowadays as you can easily get the funds whenever needed. One of the common forms of collateral-free lending is personal loans, which are readily available from various financial institutions. 

After submitting your personal loan application, the approval and disbursement process happens quickly. How you utilise the loan amount altogether depends on you. You can use it for several reasons, like: 

• Business needs
• Luxury/abroad travel
• Higher education
• Personal purchases
• Health-related crisis 
• Wedding
• Home renovation

Read on to learn more about lending without collateral, its eligibility and document requirements.

What is a personal loan without collateral?

A bank or a lending institution gives a personal loan to address various financial needs. When you submit the loan application, the bank or the lender won’t examine the end-use.

The most convenient feature of this loan is that it doesn’t ask for security or collateral, meaning you don’t have to pledge any documents or assets as security for the loan. Therefore, these loans are more accessible than others. To qualify for personal loans without security, lenders consider certain aspects, like creditworthiness.

Generally, they assess your credit score, which determines your creditworthiness. A desirable credit score is 750 or above. Having a good credit rating and history shows that you are responsible for repaying your credit. This lowers the lender’s risk and increases your chances of getting a personal loan.

Eligibility criteria for a personal loan without collateral

Other than the credit qualifications, here are some general eligibility criteria for a personal loan with no collateral:

• The applicant should be an Indian citizen

• The desirable applicant’s age is between 20 and 60 years
• The applicant should be either employed in an organisation or self-employed

Note: The eligibility criteria may vary from one lender to another.

Getting personal loans from banks is easier if you are an existing client since they already have your details, including your creditworthiness. This increases your chances of approval. Therefore, banks and lending institutions check the following parameters to assess your repayment capacity:

• Salary or income
• Flow of cash
• Stability in business or work 

Document requirements for a personal loan without collateral

The following is a general list of documents for a personal loan:

• Proof of age, address, and identity
• Passport-size pictures of the applicant
• Duly filled loan application
• Proof of income, like salary slips and bank statements

Steps to get a personal loan without collateral online

To avail of a personal loan from a bank, you can visit the lender’s branch and fill out the application form. Another way to avail a personal loan is through online lending portals and applications. 

Here are the steps to follow to get a personal loan online:

• Step 1: Download the lender’s application or visit their website
• Step 2: Log in and fill out the loan application form with your personal and loan details
• Step 3: Submit KYC documents like the Aadhaar card, PAN card, etc.

After you submit the form and required documents, the financial institution will assess your application and verify the documents. Upon approval, the financial institution will transfer the amount directly to your bank account.

Points to note when opting for a personal loan without collateral

Here are two commonly asked questions with answers regarding personal loans without security:

1. Does a personal loan without security/collateral accompany higher financing costs? 

The financing costs of a personal loan, including the interest rates, depend on certain aspects, such as:

• Credit profile and history
• Required loan amount
• Income proof and history

When such aspects are strong, you can get a loan on favourable financial terms.

2. How does the loan repayment process of personal loans without collateral work?

You can generally get personal loans for short or medium tenures. The loan term can range from 12 months to 60 months. The loan repayment process is also very similar to other types of loans. You repay it in equated monthly instalments (EMIs), which generally begin the month after the disbursement. 

You can also adjust the EMI amount while getting the loan to ensure that it is more pocket-friendly. Moreover, checking the terms and conditions of the loan repayment process before proceeding is essential. This is because the foreclosure terms or charges for personal loans will differ.

Benefits of a personal loan without collateral

A personal loan without security is not only possible but is also easy to get. Personal loans have several benefits, like:

• Easy application process
• Flexible loan repayment tenure
• No end-usage restrictions
• Quicker approval and disbursal processes

In addition to these, online lending platforms allow you to get funding even without stepping out of the comfort of your home. They may even approve loans and transfer the amount to the bank account on the same day.

Fibe is a leading lender offering lending without collateral. You can get an Instant Personal Loan of up to ₹5 lakhs, that too, at affordable interest rates starting at 2% per month and without any collateral. All you have to do is meet the eligibility criteria and submit the required documents. Download the Fibe Instant Loan App or log in to our website to apply today!

FAQs on Getting Personal Loans Without Collateral 

Can you borrow without collateral?

Yes, you can get a personal loan from money lenders without security requirements, like Fibe.

Can I get a personal loan without collateral?

Yes, you can avail of a personal loan without collateral easily from online lenders like Fibe. 

What is the maximum loan amount I can get without collateral?

The maximum loan amount varies across lenders and depends on your creditworthiness. At Fibe, you can easily get a collateral-free personal loan of up to ₹5 lakhs.