Here’s all you need to know about a personal loan for unemployed individuals

Here’s all you need to know about a personal loan for unemployed individuals

Personal loans fall under the category of unsecured loans. Therefore, other than having a stable source of income, the borrowers are also required to meet certain eligibility criteria. However, personal loans are also provided to unemployed individuals these days. Many leading financial institutions are offering loans to individuals who do not have a stable source of income. There are also various loan schemes launched by the Central and the State Government to provide loans to unemployed individuals.

If you are unemployed, and urgently need to avail a personal loan for unemployed, then below are some of the important tips that you need to keep in mind:

Credit History

Maintaining a good credit history increases the chances of availing personal loans. One can maintain a good credit history by repaying the credit on time. It shows that you have a lower risk of becoming a defaulter, and therefore, increases your reliability towards the lender

Relation between the Lender and the Borrower 

Maintaining a good relationship with the lender helps you to borrow funds when you do not have a stable source of income. When you maintain a positive relationship with the lender, there are chances that he will provide you with the loan based on it

Appeal with a Guarantor 

When you want to avail a personal loan for unemployed, it is suggested that you apply for the loan with a guarantor. A guarantor is a person who repays the loan when the person applying for the loan fails to repay it. Therefore, applying with a guarantor higher your chances of availing the loan

Chances of Employment in Future 

If you can provide the banks with certain evidence that there are good chances you will not be an unemployed person in the future, then your chances to avail of the personal loan increase. Documents such as appointment letters from stable companies work as it shows the lender that you can repay back the borrowed money with the income from your future employment

Types of Personal Loans for the Unemployed 

There are many types of personal loans available for the unemployed in India. Some of them are:

Gold Loan: Unemployed individuals usually avail of the gold loan as they are comparatively easy and quick. The personal gold of the borrower has to be provided as the collateral in this type of personal loan

Secured Loan: This type of loan is very common among unemployed people. In the case of secured loans, the borrower provides certain collaterals against the loan amount. This poses less risk for the lender andhelps in lowering the interest rate for the borrower

Borrowing Against Fixed Deposit: The banks may provide you with a personal loan if you have a fixed deposit in a bank

Credit Against Life Insurance: When you are unemployed and going through a financial crunch, you may borrow money from the financial institutions against your life insurance policy

Apart from these, there are various Central and State Government loan schemes available for unemployed people. Pradhan Mantri Rozgar Yojana (PMRY), New Entrepreneur Cum Enterprise Development Scheme (NEEDS), Agriculture Loan, Pradhan Mantri Mudra Yojana for Women (PMMYW), Prime Minister’s Employment Generation Program (PMEGP), etc. are some of them.

Though you may face some kind of rejections while applying for personal loans when you are unemployed, you should not be discouraged. You can connect with the banks where you have any kind of account. They may consider various eligibility factors while you are unemployed and provide you with loans accordingly.