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Collateral Free Loan
Have you heard about collateral-free loans? Are you on the lookout for such loans? Wondering what a collateral-free loan is? Then you are in the right place! Read on to know more.
What is Collateral?
In terms of banking terminology, collateral is an asset that you borrow against. In the event that you do not repay the loan and default, the lender takes possession of the collateral asset. For instance, if you default in case of a mortgage loan -- where you have pledged your house as collateral -- the bank will take your house as payment.
Collateral Free Loan Definition
So basically, a collateral free loan means that you do not have to offer any asset or pledge collateral to borrow against. The loan given to you is unsecured, and the lender doesn't have any asset to fall back upon in case of default. Hence, the interest rate on such loans is very high, unless you have a clear credit history.
If you are in a position where you require urgent funds, then you most probably might be looking for a collateral free loan. You might need money for medical expenses, unexpected expenses in case of a car repair or even something as simple as going on a luxurious vacation. Loans for such expenses is generally referred to as personal loans.
How Are Loans Disbursed Without Any Collateral?
Such loans are generally disbursed after scrutinizing your credit history and net worth. While making a loan sanctioning decision, your income, credit history, age, employment history and stability, and various other factors are considered by the lender.
Higher your credit score, better your chances of approval of loan at low interest rates.
Features of Collateral-Free Loans
• Flexible tenure up to 5 years
• Attractive rates of interest – depending on your credit history
• Flexible tenures ranging from 12 months up to 60 months.
• Easy loan payment options like Auto-debit / ECS / PDC.
• As the name suggests, no collateral or security is required
• Minimal documentation and simplified application procedure
• Quick processing and direct credit of funds
• Instant personal loans available with leading banks
• Facility to apply online with most lenders
Collateral Free Loan -- How to Apply?
You can check your eligibility and apply for a personal loan by signing up with CreditMantri.
CreditMantri matches your credit and demographic profile to the lender's lending criteria and presents you a shortlist of only those lenders willing to lend to you based on your unique credit profile. In effect, we pre-screen your application to make sure you are likely to qualify as per the lender's credit criteria. Hence the chances of your business loan application getting approved is higher.
Click here to sign up and apply for loans, the CreditMantri way!