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How to Get a Small Personal Loan Without Collateral?

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Created on
March 24, 2023


What’s Inside

If you require some cash to meet emergency expenses, you can apply for a personal loan without collateral. Generally, personal loans are unsecured loans, meaning that you do not need to pledge any asset with the lender to reduce their risk.

You can use such small collateral-free loans for various purposes. For example, if someone in your family falls ill unexpectedly, you may have a sudden medical expense to take care of. Alternatively, your home or vehicle may need repairs following damages in a natural disaster like a flood. Personal loans without collateral make it easier to handle such unforeseen costs.

Is Collateral Required for a Personal Loan?

No, personal loans do not typically require collateral since they are unsecured. Unsecured loans are simply those not secured by any pledged asset. On the other hand, other loans like home and two-wheeler loans are secured by the asset you purchase with the funds borrowed.

Getting a personal loan without collateral can be beneficial if you do not have any assets to pledge, like gold, fixed deposits or securities. On the other hand, the absence of collateral may translate to higher interest rates when compared with secured loans. This is because the higher interest rate compensates for the increased risk to the lender stemming from the lack of collateral.

How to Avail

Now that you know if the collateral is required for a personal loan, let’s check out how you can avail of an unsecured personal loan.

Check the Eligibility Criteria

Banks and other financial institutions look at different factors to determine a borrower's eligibility for a collateral-free personal loan. They include the borrower's age, the nature of employment, the annual income and the credit score. Depending on the bank you choose, the eligibility criteria may vary slightly. Please check these criteria to see if you qualify.

Look for Competitive Loan Offers

You can compare loan offers from different lenders and find the options at the most competitive interest rates. Comparing your options lets you find the loan with the most favourable terms and conditions. Check if the repayment tenure is convenient for you and look for foreclosure charges, if any.

Offer Proof of Income

Once you’ve identified a loan offer that you qualify for and determined if it is favourable, you need to offer proof of income to the lender. This is necessary because you will not be pledging an asset as collateral. If you have sufficient annual income, the lender can allow you to borrow funds at attractive interest rates.

Improve Your Credit Score

If you do not have a good credit score, you may find it tough to avail of collateral-free personal loans. So, if your credit score is below 750, you must focus on improving this rating before you can use a personal loan without collateral. To improve your credit score, repay your debts on time and refrain from taking on any new loan until you pay off your current loans.


In conclusion, personal loans without collateral provide a convenient option for obtaining cash to meet emergency expenses. Unlike secured loans, these unsecured loans do not require pledging any assets, making them accessible for individuals without collateral. While collateral-free personal loans come with higher interest rates, they offer flexibility in handling unforeseen costs such as medical expenses or home repairs. To avail such loans, it is important to meet the eligibility criteria set by lenders, compare loan offers for competitive rates, provide proof of income, and work on improving credit scores for better loan options.

You can quickly get collateral-free instant loans via pre-approved offers online. If this sounds like something you want, you can always download the Fi Money app and check if you are eligible for a pre-approved instant loan. If you are, you can borrow up to ₹5 lakhs without pledging any asset as a security. In addition to this, you also get the benefit of competitive interest rates on Fi with zero pre-closure fees.

Frequently Asked Questions

1. Is it easy to get an unsecured personal loan?

Getting an unsecured personal loan without collateral is relatively easy, provided you have a good credit score. You will also have to meet the other eligibility criteria set by the lender about the age and income levels of the borrower.

2. What is the limit of an unsecured loan?

If you are getting a personal loan without collateral, the maximum amount you can borrow varies from one lender to another. Typically, the upper limit is around Rs. 20 lakhs, although some leading lending banks offer unsecured personal loans up to Rs. 30 lakhs or even Rs. 40 lakhs.

3. Which loan has no security?

Unsecured loans are available that do not require collateral or security. Some popular unsecured loan options include personal loans, credit card loans, and education loans. These loans are granted based on the borrower's creditworthiness, income, and repayment capability, without the need for providing any collateral. However, interest rates for unsecured loans are typically higher compared to secured loans.

4. Can I get a personal loan without income proof?

Getting a personal loan without income proof is challenging as most lenders require proof of income to assess the borrower's repayment capacity. However, some lenders may offer loans based on alternative criteria such as assets, co-applicants with income proof, or credit history, but such options are limited and may come with stricter terms and conditions.

5. What is the smallest personal loan you can get?

The smallest personal loan amount you can typically get in India varies among lenders. It can be as low as ₹10,000 or even lower in some cases. However, the exact minimum loan amount offered by different lenders may vary, and it's important to check with individual lenders to determine their specific minimum loan size.


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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How to Get a Small Personal Loan Without Collateral?


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