A loan requirement is not restricted to the middle-income group. The high-income bracket also requires frequent loans. People that don’t earn a lot have a higher loan requirement, but find it difficult to obtain a loan due to their credit scores.
Though difficult, it is not impossible for them to get a loan. They can choose other means for a low salary personal loan. Such loans are different from personal loans in terms of their eligibility criteria, the tenure of payment and the rate of interest charged. If you are property planning and looking to invest, loans are a smart move to look into. The features of these loans are discussed below:
No Income Related Criteria
When your income levels are low, you are forced to look at other sources of obtaining a loan. Within a bank, you can get a loan against your fixed deposits and gold. The gold loan can also be availed from NBFCs, which would be willing to accept other valuables as collateral against a loan. These loans do not consider your income as a deciding factor for loan disbursal. In desperate times, when a loan is absolutely necessary turning to low-value loans is the safest option.
Requirement of Collateral
As mentioned in the previous point, collateral is required in order to process these loans. Either in the form of an FD, gold, property papers, or documents for some other assets that you might possess, the presence of collateral becomes vital. The amount you can receive as a loan is in proportion to the value of the collateral. This is required to provide security to the lending agencies from defaulters. If a situation arises that the borrower is unable to pay the money, the agency is secure against a loss and will take over the collateral.
Higher Rates of Interest
The rate of interest varies depending on the collateral selected. If an FD is chosen as the collateral, the rate charged is only a little higher than what a bank would provide you with. In the case of gold, the interest generally ranges between 10-14% depending on the amount of money being borrowed. When a loan is being availed from NBFCs, you should be prepared to pay a hefty interest amount (about 14-20%), but this is completely dependent on the organization.
Choice of Tenure
You can choose to pay the loan quickly or you can decide to opt for a longer tenure depending on your capability. Though there is an upper limit to the length of the tenure, you can close the loan as soon as you wish without being subjected to any penalties. Consider a scenario when an expected payment is delayed and you have a pressing requirement for the day. You can take a loan and close it as soon as that expected payment comes in. This way you have effectively used a loan without over-paying.
It is possible to get a collateral free low salary personal loan from fintech organizations such as MoneyTap, which offer you low-value loans with interest charged only on the amount that you actually withdraw from the fund. The process of application is easy to understand and seamless, making it a pleasurable experience for you.