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?
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.