get a personal loan

In this era of uncertainties, we may face financial shortcomings. For example, many people were in dire need of funds during the recent COVID pandemic. As a result, many people opted for personal loans during the COVID pandemic. Instead of depriving ourselves of basic needs, we can opt for personal loans. However, there are several rules attached to getting a personal loan in India. As a responsible individual, one should know the legal way to get a personal loan in India. Let’s dig deeper to know whether you can/cannot use a leased car to secure a personal loan.

Is it allowed to use a rented/leased car for acquiring a personal loan? 

Do you want to get a personal loan with a leased car as collateral? First of all, you need to understand the concept of car leasing. When you opt for car leasing, you aren’t owning a used/new car. Instead, you are borrowing a car from anyone for a fixed time. For example, consider a car leased for four years in India. It means that someone has rented a car for the coming four years. However, he will have to return the leased car to the rightful owner after four years. Usually, when you borrow a car on a lease, you have to pay monthly payments as rent amount to the rightful owner.

Since you aren’t owning a car, you cannot use a leased car for securing a personal loan in India. A leased car can only be used to fulfill your travel needs. Loans that demand collateral look for something you own. If you permanently own a car, it can be used as collateral to secure a loan. One should not even try to apply for a loan with a leased car as collateral. Loan providers may find out about it and mark you as a defaulter. It isn’t compulsory to pledge collateral to secure a personal loan. There are ways to acquire a personal loan in India without collateral.

Ways to acquire a personal loan in India without collateral

Some ways to get a personal loan in 2022 without collateral are listed below:

  • Choose an NBFC to acquire collateral-free personal loans

A reputed NBFC like Fullerton India can offer collateral-free personal loans. You can use the personal loan interest rate calculator on its website to check the preferred amount of loan. You can then quickly fill out the loan application and complete the KYC verification. Based on your salary, you can secure a personal loan easily with Fullerton India.

  • Boost your credit score for getting collateral-free loans

If your credit score is more than 650, you possess high creditworthiness. NBFCs will trust you as you are likely to repay the loan amount timely. Along with the credit score, you should also build a good credit history to get a personal loan without collateral. If you have paid all your loan installments timely, you will possess a good credit history and score.

  • Improve your debt-to-income ratio to get collateral-free loans

The ratio of your debt amount to the income amount should be less than 50%. For example, consider a person who is earning INR 10,000 and has a monthly debt bill of INR 5,000. For such a person, the debt-to-income ratio will be 50%. The debt-to-income ratio tells the loan provider about your financial credibility.

  • Showcase a stable income to get a loan

You should have a stable source of income to acquire a personal loan in India. You should be working in a firm for at least half a year to get a personal loan easily. Your latest salary slips are checked while processing your loan.

Must Read: What are the top reasons that you should go for a gold loan?

With the online portal of Fullerton India, you can get a paperless personal loan easily. You don’t need to stand in queues to acquire a collateral-free personal loan. Use the personal loan interest rate calculator on the online portal of Fullerton India!

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