Agri Commodity Financing
What is an 'Unsecured Loan'An unsecured loan is a loan that is issued and supported only by the borrower's creditworthiness, rather than by any type of collateral. An unsecured loan is one that is obtained without the use of property as collateral for the loan, Unsecured loans can be segregated into two broad categories namely personal loans and business loans. While Personal Loans are funds borrowed for meeting personal financial needs, business loans are taken by customers who want extra cash to be utilized in fulfilling business needs like expansion, set-up etc.While granting you an unsecured loan, lending entities look at customers’ credit history and assess the risk involved in lending you money. The rate of interest offered is thus a reflection of the level of risk involved with a particular customer. Since unsecured loans are offered by banks to customers without any requirement of collateral or security submission, hence these loans generally come at a higher rate of interest and have higher income eligibility criteria and lower loan amounts as compared to any other secured loan.
Loan tenure for unsecured loans is a maximum of 5 years during which the borrower is expected to repay the full loan amount along with the applicable interest amount.
Unsecured loans start at an interest rate of around 15.5% per annum and go higher to up to 22-24% depending upon the annual income of the applicant.