In today’s time of globalization and a raised standard of living, there are various financial needs for which customers require quick and convenient credit. Unsecured loans are gaining popularity as great credit instruments. Various private, as well as public sector banks, offer unsecured loans to their customers. Fierce competition in the financial sector has led to banks easing the process of obtaining unsecured loans.
Your unsecured loan application is approved based on our confidence in your ability to repay and your promise to make payments. Your signature on the unsecured loan agreement is all that you bring to the table. This means that if you default on the unsecured loan, we can't automatically seize your property. For instance, We do not have the ability to seize your assets if you stop paying the EMIs on an unsecured loan.
However, you must keep in mind that if you fail to make timely payments on an unsecured loan, you can go deep into debt. This is because unsecured loan interest rates may be quite high. The reason for this is that you are not giving any collateral as security like you would with a secured loan, which places a higher level of risk on the lender. The higher rate of interest apart, the borrowing limit for this type of loan is usually lower. But the main attraction of unsecured loans is that the approval process is quicker and faster compared to a secured loan.