Unsecured Personal loans as its name suggests are the personal loans which are provided without any collateral or security. A collateral or security is the asset or assets you provide to loan lender as a guarantee that in case you couldn’t repay their loan then they can use that asset to recover their money loaned to you. For unsecured loans you don’t have to provide for any collateral. In these types of loans, the money is provided only on the basis of the credibility of the loaned. The loan providing institutes or banks has many criteria to determine the credibility of a person. The main criteria for a person to be eligible for this loan is his income and income status. Income is the amount of money a person earns monthly or yearly, and income status is the stability in the income and the prospects of future income. Many income types are considered to be unstable type of income these are considered non-eligible for a personal loan. Also, the credit history of the candidate is also an important criterion for the loan. In India the credit history of a person is checked through an authority called CIBIL. The details of the loan applicant are consulted with CIBIL by the loan providing banks to verify loan applicant’s credit history. If the credit history is cleared by the CIBIL, the chance of the person of getting loan increases. After the bank is satisfied by the income and credit history of the loan applicant then other documents and criteria required for the loan are checked by the banks.
Important documents required for an unsecured personal loan are: –
- Valid identity proof.
- Valid residence proof.
- Valid age proof.
- Valid signature proof.
- Valid Income proof.
- Post-dated cheques (pdc).
- Loan Application letter with recent photographs.
- Valid business continuity proof (I.T. returns or bank certificates).
- Guarantors and the same set of their documents.
Important eligibility criterias for an unsecured personal loan are: –
- Loan amount can be from Rs. 50,000 to Rs. 20 lakhs only.
- Person should have a good credit history.
- Age of the person should not be less than 21 years and on the date of maturity of loan his age should not be mre than 60 years.
- Net annual income should not be less than Rs. 1.5 lac per annum.
- Type of income should be considered stable by the loan provider.
After the bank is satisfied that all the criteria required for the loan are fulfilled by the applicant and all the documents required by the bank are provided by the applicant, then according to the capability of the person loan is provided.