Why Personal Loans are Better than Secured Loans?

The basic difference between a secured loan and a personal loan is that; a secured loan is backed by collateral which means something you own (property, gold, car, or anything) can be seized by the bank if you default on the loan while on the other hand an unsecured loan does not require any form of collateral.

There are various loan options in the market such as home loans, car loans, gold loans, etc. but personal loans seem to be the best go-to option for people who seek financial assistance. So, apply for personal loan with instant approval and meet all your personal requirements.

Now you must be wondering how and why. 

Let’s discuss this in detail and get to know more about it.

Reasons why Personal Loans are the better option?

In this section, I'll highlight the points “why personal loans are better than secured loans”. Also, we will discuss; where you can avail of the best online instant personal loan and how to apply for personal loan instant approval. 

1. Collateral Free

On the basis of security needs loans are categorized into two major categories: secured loans and unsecured unsecured. Unsecured loans such as personal loans do not require any collateral i.e. you can apply for a loan without giving any asset to the lender. You will get an online instant personal loan without giving any security in return. In the case of secured loans, you can only get the loan amount when you are giving security (home, gold, car, property, etc. ) to the lender. And in case if you do not repay the loan amount on time, your asset can be seized and will be sold to make up for the debt. This is the most important reason why unsecured personal loans are a great option for everyone. To apply for an unsecured loan and get instant approval on a personal loan.

2. Quick Approval

Though secured loans are available at relatively low interest rates it takes much time for the loan approval which can vary depending on the loan amount, so this is not the right decision to opt for a secured loan during emergency situations.

But when we look at personal loans which are unsecured in nature and also get approved very easily and quickly. The approval period depends on the lender, for instance, My Mudra approves the loan application quickly within 24 hours.

3. Flexibility in  Loan Amount

One can take the loan amount to cater to every financial requirement anytime. Personal loans are the best option to meet those requirements as you can avail minimum loan amount of Rs. 50,000. Secured loans have that flexibility as the minimum loan amount is very high i.e. Rs. 1,00,000.

There is a connection between the repayment tenure and interest rate. The longer the tenure, the higher the overall interest rate on the loan amount. Online instant personal loan offers a repayment tenure starting from just 3 months up to 84 months making the unsecured loan a more economical option.

4. Credit Score 

We are very well aware of the credit score in the loan process, which plays a vital role while availing any type of loan. The CIBIL score can be very poor (>600) to excellent (<750) depending on the credit history of an individual. A person with a high credit score has a higher chance of getting a loan at a competitive interest rate. But what if a person has a low score? We believe that even if the credit score is low access to credit should not be blocked anytime. 

Secured loans have strict eligibility criteria and therefore individuals with lower credit scores will not be able to access these loans. On the other hand, personal loans are provided to even those whose scores are relatively lower. 

There are few lenders in the market such as My Mudra that offer loans to applicants who have CIBIL scores of 680 and above. If the loan amount is repaid on time, this increases the chance to improve the credit score of the borrower.

5. Easy Application Process

While applying for the secured loan you have to go through a long application process since secured loans are not collateral-free, one has to go through the appraisal process and has to wait till the lender decides the fair value of your property/assets.

In the case of an unsecured loan, you just have to submit the documents and wait for the loan approval, unlike secured loans see how easy the process is to get the unsecured instant personal loan online.

Conclusion:

As discussed above we have seen why personal loans are so much popular among all the loans and the various reasons behind it. So to opt for the best, choose personal loans instead and wing your dreams today with instant personal loans online through My Mudra. In conclusion, we can say that an unsecured loan may be a good fit for your financial needs.

Keep reading about the loans and get to know many useful, factual, and informative things for the best personal loan offer, visit our website www.mymudra.com, and apply today.