Even the best-laid financial plans can come undone due to unforeseen and unpredictable exigencies that life can throw at you. In their time of need, many people end up dipping into their savings or liquidating their long-term funds to get the cash they need. This, however, may not be the most prudent choice, as you will lose out on long-term gains or may have to pay a premature withdrawal fee. Instead, there is the option of applying for an unsecured personal loan to meet your financial needs.

How to apply for a personal loan?

While the specific steps may vary across lenders, typically, here’s how you can apply for an unsecured personal loan online.

1. Go to the loan application page of your preferred lender.
2. Read the eligibility criteria and documents required to keep them handy.
3. Fill out the application form online.
4. Upload the required documents to support your application (KYC documents).
5. Reconfirm the details filled in your application form and submit.

Your loan application will undergo a verification process. Upon its approval, the funds will be disbursed to your account.

Best Practices

Compare Loans

There is no dearth of companies offering personal loans. Therefore, you need to compare the terms and conditions, and the interest on the unsecured loan offered by them before making your decision.

Check Your Credit Score

Your credit score is one of the most important factors lenders use to determine your loan eligibility and interest rate. Before applying for a loan, check your credit score. If you have a poor credit score, you may need to consider a secured loan or work on improving your credit before applying.

Assess Your Personal Financial Situation

Determine how much money you need to borrow. While a personal loan can be used for a variety of purposes, you should borrow based on your ability to repay on time. Missed EMIs and delay in payments can cause a dent in your credit score. Evaluate your income, expenses, and debts to determine whether a personal loan is a viable option for you and what will be its ideal tenure that doesn’t cause a strain on your monthly budget.

Consider Fi Money for your personal loan

You can get an instant loan directly to your Savings Account through the Fi Money app. These are pre-approved personal loans made available to select users with good credit scores. On Fi, this process is 100% paperless, and the loans are provided at competitive interest rates — where each user remains in control with complete visibility of all details. Plus, you can avoid EMI late fees by setting up automatic in-app payments. Our partner bank (Federal Bank) assigns an eligible loan amount to each user (up to ₹5 Lakhs).

Here’s how you can get an instant unsecured personal loan through the Fi app.

1. Register and open an account on the Fi Money app.
2. Based on your profile, you can check if you are eligible for a pre-approved instant loan of up to ₹ 5 Lakhs.
3. After that, you can apply for the loan easily through the app without the need for any needless paperwork or documentation.

Frequently asked questions

1. How soon can I get an unsecured loan?

Technology has made the loan application process entirely paperless. This facilitates quick verification of the application and supporting documents, quick approvals, and an almost instant loan amount disbursal. Check your lender’s website to know their loan disbursement turnaround time.

2. What can I use my unsecured loan for?

An unsecured personal loan is very versatile and can be used for a variety of purposes. These include home repairs and renovation, paying medical bills, sponsoring higher education, paying for wedding-related expenses, domestic or foreign travel, and even debt consolidation.

3. What are the requirements for unsecured loans?

Here are some of the pre-requisites for an unsecured loan:

• A stable employment history is required for applicants.
• Salaried individuals need a minimum of 2 years of professional service, while self-employed individuals should have a minimum of 5 years of earning tenure.
• The age range for salaried borrowers is above 21 years and below 60 years, while for self-employed individuals, it is between 25 and 65 years.
• Applicants must provide the necessary documents, including proof of residence, salary slips, identity proof, and completed forms.
• Credit history plays a crucial role in determining eligibility, interest rates, and loan amount.
• Existing EMIs from other loans are also considered by the lending bank when determining loan eligibility.

4. Are unsecured loans hard to get?

Obtaining unsecured loans in India can be relatively challenging compared to secured loans due to the higher risk involved for lenders. Lenders often have stricter eligibility criteria and may require a good credit history, stable income, and employment. However, certain financial institutions and online lending platforms do offer unsecured loans, albeit with higher interest rates and potentially lower borrowing limits.

5. Can you get an unsecured personal loan at a bank?

Yes, banks in India do offer unsecured personal loans to eligible individuals. However, the approval and terms for such loans depend on factors like the applicant's credit history, income stability, employment status, and other eligibility criteria set by the bank.

6. Can I get loan without collateral?

Yes, it is possible to get a loan without collateral. There are various financial institutions and banks that offer unsecured personal loans based on the borrower's creditworthiness, income stability, and other eligibility criteria. These loans typically do not require any collateral or security but may have higher interest rates compared to secured loans.

7. What are the main disadvantages of an unsecured loan?

The major disadvantages of unsecured loans are that the loan amounts offered are generally smaller with higher risks and in turn interest rates and payments are higher and expensive.