Collateral-free loans for newbie borrowers

You are young and have taken up a job recently and you want to gift a high-end LED TV costing Rs 3 lakh to your parents who have been watching their favourite soaps and reality shows on their old 32-inch TV. But since you are new to the job, you don’t have the money to buy the TV. You might think that it would be difficult for you to get a loan to buy the TV because you do not have any high-value asset such as gold, house, car, etc. to offer as a collateral to the bank or the financial institution. But don’t worry. Now, you can get the amount by taking an unsecured or collateral-free loan.

The unsecured loans are available online and are offered in the form of line of credit to the borrowers. The collateral-free loan is a personal loan and the lender offers to the borrower a line of credit from which he can withdraw any amount ranging from Rs 3,000 to Rs 5 lakh. Since these are small-ticket loans and are usually available through online mode, the documentation required is minimal and the loan processing is also done faster than loans obtained through the conventional channels. Also, there is no requirement for the borrower to provide any guarantor for the loan.

These loans come in handy to overcome temporary cash crunch or for buying consumer durables, pricey gadgets, vacation travel, renovation of house, meeting emergency medical expenses, etc. Also, these loans are a boon for those who have begun their careers and have no collaterals to offer to the banks and financial institutions. Of course, since these are unsecured loans, the rate of interest on these loans would be higher than loans offered against collaterals. So, check out the rate of interest and then decide whether you want to apply for the loan.