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Is There Any Loan Without Collateral?

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Created on
April 13, 2023


What’s Inside

Have you ever had an emergency financial requirement that you couldn’t easily meet? Most people in such a situation tend to resort to breaking their investments.

However, there’s another option you can consider — which is obtaining a personal loan without collateral. Since this is a type of unsecured loan, you do not have to pledge any asset to the lender as collateral.

Aside from a personal loan, there are many other types of loans without security requirements. The eligibility criteria for money lending without collateral tend to be stricter to reduce the lender’s overall risk.

Eligibility Criteria for Loans Without Collateral

The exact eligibility criteria for loans without mortgage or collateral may vary from one lender to another but broadly, the following criteria may be evaluated.

  • Age of the borrower
  • The annual income of the borrower
  • The stability and nature of their employment
  • The credit score of the borrower

5 Different Types of Loans Without Collateral

While you may be familiar with personal loans without collateral, there are many other unsecured credit facilities available in India. Here’s a preview of the different types of collateral-free loans you can avail of.

Personal Loans

  • Personal loans are unsecured loans available to individuals
  • Borrowers can use the funds for various purposes, such as paying medical bills, consolidating debts, funding vacations, or making premium purchases
  • No collateral is required for personal loans
  • Interest rates for personal loans are higher compared to secured borrowing like home loans

Student Loans

  • Student loans or education loans available for higher education in India or abroad
  • No collateral required
  • Repayment criteria strict
  • EMIs must be paid within 12 months of completing the course or 6 months after being employed, whichever is earlier

Credit Card

  • Credit cards are a type of credit facility that requires no collateral.
  • The ‘loan’ that you avail of through this channel is essentially restricted to the credit limit on your card.
  • You can use your credit card to make payments and purchases or even withdraw cash up to this limit.
  • However, you must keep in mind that the interest rates on credit card outstanding balances are higher than the rates for other types of unsecured credit facilities.

Revolving Loans

  • A revolving loan is also a kind of collateral-free credit facility that you can avail of without offering any asset as security.
  • Here, the credit limit is predetermined by the bank.
  • You can borrow the funds needed as many times as you want, as long as the total credit limit is not exhausted.
  • As you repay your borrowings, the credit limit is restored.

Bank Overdraft Facilities

  • Bank overdraft facility allows you to withdraw money beyond your account balance.
  • Interest is charged on the excess amount withdrawn.
  • You can repay the borrowed amount as per your convenience within the time stipulated by the bank.

Summing Up

Whether you are salaried or self-employed, you can choose from the different types of loans without security requirements as outlined above. No matter what type of loan you wish to apply for, evaluate the eligibility criteria before you proceed. This will allow you to identify the loan offers that you can easily qualify for.

Get Instant Personal Loans Without Collateral

Fi Money provides instant loans that arrive directly in your savings account. 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 licensed partner bank assigns an eligible loan amount to each user (up to ₹5 lakh).

Frequently Asked Questions

1. Are there loan options available that do not require collateral?

Yes, personal loans are a prime example of money lending without collateral assets pledged in exchange for the funds borrowed.

2. How can I qualify for a loan without having to provide collateral?

To qualify for an unsecured loan without having to provide collateral, you need to have a good credit score, low or no existing debts and a regular source of income.

3. What are the typical eligibility criteria for collateral-free loans?

The eligibility criteria for loans without mortgage or security typically include the borrower’s income, nature of employment and credit score.

4. What types of collateral-free loans are commonly offered by financial institutions?

Some common types of loans without security include personal loans, student loans, peer-to-peer loans, bank overdrafts and credit cards.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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Is There Any Loan Without Collateral?


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