Secured vs Unsecured Personal Loan: What is the Difference?
Jun 25,2021 Borrowing, OMLp2p Loans, Personal Loan
Emergencies or unwarranted expenses may knock your door without any warning e.g health emergency, a sudden expense or want to go on a trip etc. which will make you wonder to which financing option to opt, a personal loan may be the best solution. It is quick and easy to process, requires minimal documents and the loan amount get disbursed in your bank account.
Another useful feature of a personal loan is mostly unsecured if you desire. No need to pledge any asset while availing personal loan which makes it the preferred option for millennials.
What are Secured and Unsecured Personal Loans?
- To get a secured loan, you offer something you own as security. You agree that in case you default on the EMI payment, your lender / financer can seize the collateral / asset. In the case of mortgage or auto loan, your residence or vehicle is usually the collateral. For a secured personal loan, the collateral might be money in bank account or a fix deposit.
- An unsecured personal loan does not to pledge any collateral / asset for the loan. If you do not repay loan EMI's on time, the lender / financer can't claim collateral / asset as compensation. But if you default on either unsecured or secured loans - your credit scores get impacted which could make it more difficult to get approved for other types of credit in future.
Sources for secured and unsecured personal loans
Three types of lenders that offer personal loans in India;
- Online loan companies
Undeniably, lenders can differ widely in their loan-qualification requirements, documentation, tenure and the interest rates they will offer. Banks often prefer to lend to consumers with higher credit scores and active credit history. NBFC's may be lenient in their requirements while approving loans and may be able to extend better interest rates.
Online loan companies / lenders may offer lower interest rates for applicants with good credit score. And they can be convenient because the entire loan process from application till disbursement is typically handled digitally.
How to apply for an Unsecured Personal Loan?
Submit An online application for an unsecured personal loan is a quite simple process. If you are over the age of 21, have Indian citizenship and earning a net monthly income of Rs. 30,000/- then you are eligible for a personal loan.
You can visit the OMLp2p website and fill in an online application form. Please upload the following documents-
- Address Proof such as Aadhaar card, Driving license, Voter ID, etc.
- PAN card
- Income proof such as Form 16 / Last three month's salary slip
- Bank statement of salary account for last three month's
- Passport-size photographs
A personal loan is the easily accessible financing option available in the current scenario. With OMLp2p, you can put all your loan requirements to rest and apply online for easy loans. So, register today and fulfil your needs and goals with customized personal loans.