It’s not a salary that makes you rich, it’s your spending habits.”
-Charles A. Jaffe.

What is an unsecured loan?

An unsecured loan is a loan that is not backed by collateral to guarantee the repayment. Unsecured loans are given on the creditworthiness of the person. The creditworthiness of the borrower is assessed based on the five C’s of credit: character, capacity, capital, collateral, and conditions. An example is unsecured loans are credit card purchases, personal loans, and student loans.

What are the factors influencing the approval of an unsecured loan?

1. Job-status
A lender or a bank will be interested to know that you are a salaried person or a self-employed person. One should have a steady source of income every month. On the other hand, if you are a salaried person, you have to provide your offer letter from the current organization as well as the salary payslips. In case you are self – employed, you would be asked to show proof of continuity of business and proof of ownership.

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The roots of education are bitter, but the fruit is sweet.

A good education leads the path to success. Quality education is what every parent looks after their children. However, nowadays, the cost of education has risen, and the fact that the price of studying at reputed institutions is already quite high. Hence, parents who want to provide their children with the best education, invest their money in FD (fixed deposit), Insurance plans, and Equity for the long term. However, sometimes in spite of planning so well, there are chances of deficit in finance. So an Education Loan could be an ideal solution for your dreams.

Features of an education loan:

• One can opt for an education loan if he wants to study in India or even abroad.
• The Rate of Interest can be as low as 6.6%, to even as high as 15.2%
• The guardian or parent of the student needs to be co-applicants for the loan application.
• The student can apply up to a certain amount (basically 7.5 lakhs)
• The maximum amount of loan varies from bank to bank
  • If the applicant wants to study in India, the bank can grant 10 lakh worth of loan
  • if the applicant intends to study abroad, the bank can give a loan of 20 lakh.
• Usually, the tenure for repayment of the loan is 5 to 7 years, but flexible repayment options are available. An applicant can also opt for more extended repayment periods that can go up to 10 to 15 years.
• The EMI of an education loan does not begin immediately or during the period. They provide one year time until the applicant gains the regular income.
• The interest on the education loan amount is eligible for tax rebate under section 80E of the Income Tax Act.

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“The most important investment you can make is in yourself.”
-Warren Buffett.

A shortage of funds may occur many times before getting the salary to your bank account. In that situation, advance salary loan help. In another manner, one can say that advance salary loans are temporary loans offered to salaried professionals who are working in India. Like a personal loan, the interest rate of these loans is calculated every month or sometimes daily by some lenders. The foremost advantage of these loans is that they are available to those individuals with an average credit score. It does not take more then half an hour if the person is opting for an advance salary loan. And due to this, there is a high factor of risk involved. Hence, advance salary loans come with a high percentage rate.
One is advisable to opt for an advance salary loan in an emergency when no other options are available.

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One might require a loan for various reasons. However, it’s also important to know what criteria have to be met to be eligible to get a loan, and one such important factor is your credit score. A credit score is a financial tool that helps to determine the loans you can get and the interest rates you pay. Even Insurers use credit scores to set premiums. So today let’s understand more about a credit score.

Credit / CIBIL score

A credit score is a three-digit number that measures an individual’s ability to pay back the borrowed amount. It is the numerical number that shows the creditworthiness of the person. A credit score by CIBIL ranges between 300-900 and 900 being the highest. A higher credit score offers you several benefits and helps you at the time of getting a loan or a credit card. Having a low credit score means that you are not able to pay back the borrowed sum amount. If you have a high credit score, you are entitled to get discounts on the interest rates. Moreover, a high credit score gives you the additional power to negotiate for better rates of interest on loans.

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What is a personal loan?

A personal loan is a multi-purpose loan that does not require any collateral. One can use a personal loan to meet personal expenses and business expenses.

Features of personal loan:

1. Simple documentation process.
A personal loan requires minimum documentation. Your loan can be approved within 48 hours after applying.

2. Flexible tenure.
In a personal loan, the borrower gets flexible tenure of up to 5 years to repay the loan amount, which is preferable than a credit card loan or gold loans.

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What is an unsecured loan?

An unsecured loan is a loan that is not backed by collateral to guarantee the repayment. Unsecured loans check the creditworthiness of the person. The creditworthiness of the borrower is assessed based on the five C’s of credit: character, capacity, capital, collateral, and conditions. Let us look at some of its types:

1. Personal loan

A personal loan is the most common type of unsecured loan. The personal loan can also be paid in installments. You can repay the loan in equated monthly installments (EMIs). Banks and NBFCs (non-banking financial companies) offer personal loan through online and offline process.

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