Blogs

Can I use a leased car to secure a Personal Loan?

Instagramfacebooktwitterlinkedinwhatsapp

03 Oct 2021 | 5 min read

The quick answer to this is that irrespective of the loan type (Personal Loan, business loancar loan, etc.), you can't get loan credit against a leased car. Since you have taken it on rent, this does not belong to you. So, you must have a fully own car with a clear vehicle title so as to attain a loan product against it. 

Although, today in this blog, we have stated the best ways by means of which you can avail of a Personal Loan without pledging any security against it. Read on to grab further details on the same. 

Ways to Avail Personal Loan without Collateral/Security 

When you do not pledge anything against a loan, lenders seek assurance about your ability to pay it back in full. 

To determine this, they look upon elements like your credit score and debt-to-income ratio, etc. Take a look at the below-stated ways to avail of a Personal Loan without security: 

Check On Your Credit Score 

  • Your credit score stands out to be a major element when qualifying for an unsecured Personal Loan. 
  • Typically, moneylenders do not disclose what credit score they seek, they prefer mostly good or excellent credit. 
  • Prior to applying for an unsecured Personal Loan, you must ensure that you know what your credit score is. 
  • As you will know your score, you’ll get a better idea of your chances to get approval on a Personal Loan application without collateral or security. 

Look Upon Your Credit Report 

  • Your credit score represents your creditworthiness, but it doesn’t demonstrate your whole credit picture. 
  • To get a deeper dive into your financial past, you will need to look upon your credit report too. 
  • You can get your annual credit report from each of the major credit bureaus available in India. 
  • They will demonstrate any outstanding debt, alongside your repayment history and other factors that impact your credit score. 
  • You can have a closer look at your credit report so you can see the areas where you’re on track, as well as areas you are on lack. 
  • So, you can take steps to improve the lacking elements. 
  • You can also lookout for any mistakes in the report and if you find any error, you can submit a written dispute to the particular credit agency. 
  • Fixing certain errors would also lead to improvement in your credit score. 

Pay Your Bills Timely 

  • If you have a low credit score, try to enhance it by paying your bills timely. 
  • Timely payments facilitate increasing your credit score and, consequently, boost your odds of getting an unsecured Personal Loan. 
  • If your credit score is not where you’d like it, you must take some time to boost it prior to applying around. 
  • Even if your credit score is high enough to get a Personal Loan, boosting it also could get you the best deal on the Personal Loan Interest Rate element. 

Pay Off Your Existing Debts 

  • Your debt-to-income (DTI) ratio is another crucial element affecting your credit score. 
  • If you hold a high DTI ratio then you must consider paying down your debt as it could help in boosting your credit score. 
  • Structure a plan to win over your debt, whether by making an increase in the quantum of your payments or boost your income by carrying out a side hustle. 

Show a Stable Income 

  • Lenders will also seek your cash flow sense by assessing the secondary elements such as your income and work history. 
  • While moneylenders seek your credit score to comprehend your financial history, they also take into consideration your income as a sign of your financial potential. 
  • If you show your income proof with a stable working history, it will show the lender that you can manage your repayment across the loan tenure. 
  • Contrarily, if you show unstable work history, perhaps, it can lead to the non-qualification of your Personal Loan application. 
  • Certain lenders may also ask you for the salary data or may even call your employer to verify your details. 
  • If you do not possess much money coming in, it is better that you take steps to improve your employment circumstances prior to applying for an unsecured Personal Loan. 

Conclusion 

To wrap up, as the lending institutions don't take any collateral against the loan, they look upon all your financial details considerably to be confirmed if you can pay back the loan amount. The above-mentioned ways will help you get the Personal Loan without security. 

Even though, to understand more and get the best deal on Personal Loans, you can turn around Afinoz too since we obtain association with over 33 leading lenders across the nation to help you get the best Personal Loan. To apply for the best deal, download the Afinoz loan app today from the Play Store. 

Recent Blogs