A personal loan is a type of loan that can be used to fulfill a number of expenses. For example, you can opt for a personal loan to pay for wedding expenses, home renovation, or an emergency medical requirement.
A personal loan can be borrowed from a bank, online lender, or credit union. Like any other loan, it needs to be repaid over a certain tenure through monthly installments. The repayment tenure, loan amount, rate of interest, and all other details pertaining to the personal loan plan will vary depending upon who you choose to borrow from as well as your own credit score.
For example, NBFCs like Money View offer a collateral-free personal loan amount between INR 5,000 and INR 5,00,000, depending upon your eligibility. Flexible repayment periods are also available from 3 months to as long as 5 years. Thus, personal loans are versatile in this regard as they allow you to choose the loan plan most suited to your purpose from various available options.
What Can a Personal Loan Be Used For?
As already mentioned, a personal loan can be used to meet a number of personal or business expenses, unlike a home loan or an auto loan, where the house or the vehicle is the reason for the loan and the object of collateral. A personal loan can be used for:
- The education of your child/children.
- A huge family occasion, such as a wedding
- A medical crisis
- A travel trip or unplanned tour with family
- Paying off existing debts
- Improving a bad credit score by timely repayments
- Expanding a business
- Opening a new start-up business
- Making an urgent purchase
What is Collateral in a Personal Loan?
Personal loans are of two types- secured and unsecured. Secured personal loans require you to place a surety or guarantor in exchange for obtaining the loan amount. The collateral or surety can either be a cash asset, such as a Certificate of Deposit (CD), or a savings account, or a physical asset, which is any object of value in the market, such as a car or a house. In the event that the borrower is unable to repay the money, the lender will keep the surety to satisfy the debt amount.
However, most personal loans don’t require any surety. Therefore, these personal loans happen to be collateral-free loans that can be obtained to get a lump sum of money to meet urgent financial demands. A personal loan is often used to consolidate debt or to boost creditworthiness as it can be repaid in small amounts over a long period with ease.
A collateral-free personal loan can be obtained easily as long as one meets the eligibility criteria offered by the bank or the online lender. Money View provides the best case point as its eligibility criteria are basic and easy to meet, requiring certain eligibility of age, income, and credit score only. At Money View, instant collateral-free personal loans are provided with the loan amount disbursed within as quickly as an hour.
Who to Apply for a Collateral Free Personal Loan?
Anybody can apply for a collateral-free personal loan if they fulfill the essential eligibility criteria. While the specifications of the eligibility criteria will vary with the lender, a specific minimum income value and credit score are required to obtain a personal loan. Money View offers simple eligibility on the grounds of income, age, and credit score. The eligibility factors are:
- Applicants’ age should fall between 21 years and 57 years.
- The minimum monthly income of the loan applicant should be INR 13,500 for residents of cities other than Mumbai, Thana, and the Delhi/NCR region. The minimum income of persons living in Mumbai, Thana, or the Delhi/NCR should be INR 20,000. In contrast, the income for those residing in any other metropolitan city besides Mumbai and NCR should be INR 15,000.
- The monthly salary of the loan applicant should be paid in online mode directly to their bank accounts.
- The minimum credit score requirement is 600 for CIBIL or an alternate Experian Score of at least 650.
How to Apply for a Collateral Free Personal Loan?
The process of applying for a collateral-free personal loan will vary from lender to lender. For example, the application processes for banks are usually quite lengthy, involving tiring paperwork.
Such traditional modes of opting for a loan means standing in long queues and physically visiting the bank on more than one occasion before the loan amount is finally transacted to your account.
However, money management and personal finance apps such as Money View offer a swift application process involving instant eligibility checks and zero paperwork. Everything about the loan application process is digital, which saves both time and money. The icing on the cake is that the loan amount is credited to the account within 24 hours.
To apply for a collateral-free personal loan at Money View, follow these steps:
- Download the Money View app on your phone for a seamless application. You can also visit the Money View website.
- Input the details that are asked to determine your eligibility for the loan.
- Once you input the relevant details, your eligibility status will pop up on the screen within 2 minutes. Your eligibility status will show whether or not you are eligible to apply for the loan, as well as the loan amount, repayment tenure, and other loan plan details that you fulfill if you are eligible to apply.
- Choose a loan plan, that is, the sum of the loan and the repayment period that best suits your needs.
- Upload the documents that will be asked to initiate the process of verification.
- After this, you will be sent a NACH form that you have to sign, scan, and upload. This sign seeks permission to auto-debit repayment money from your account to ensure timely EMI payment.
- Once all of your documents are verified, you will have to sign a loan agreement at the concluding step of the process. Read the agreement thoroughly before signing it.
- Finally, upload the loan agreement and wait for the loan amount. The money will be transacted directly to your account within a few hours only.
What are the Documents Required for Application?
The documents required for loan application at Money View are minimal in number:
1. As proof of address (one of the following):
- Voter ID Card
- Aadhaar Card
- Driver’s License
- Valid Indian Passport
- Electricity, Gas, or Water Bills dated within the past 60 days
2. As proof of identity:
- The PAN card of the applicant is mandatory to apply for a loan. Only if it gets rejected for quality issues as deemed by Money View, any of the following will be accepted.
- Voter ID
- Adhaar Card
- Driver’s License
- Indian Passport
3. As proof of income:
- The bank statement of the last 3 months of the concerned account in which the monthly salary is transacted. It should be in PDF form for both self-employed as well as salaried individuals.
A personal loan is a lucrative option, majorly because it is an unsecured form of a loan. If used in a tactically wise manner, a collateral-free personal loan can be used to salvage monetary losses and improve financial stability.