When you apply for a loan, lenders check your repayment capacity. A steady income is often required because the lender does not want to risk their loan being unpaid.
If you need funds for your immediate financial needs but don't have a stable job, fret not. You can avail of instant loans for unemployed persons with ease. You can also seek financing options from government schemes or approach a lender who allows you to borrow with a guarantor.
Here are some ways you can get a loan without a steady income.
1. Apply jointly or get someone to act as a guarantor
You can apply for a loan jointly with your spouse or a family member who fulfils your lender's personal loan eligibility criteria, such as a steady income and a high credit score.
Since the co-applicant or guarantor also becomes liable for loan repayment, it increases the chances of your loan getting approved.
Additional Read: Tips To Avail Lowest Interest Rates On Your Personal Loan
2. Look for secured unemployment loans
Secured unemployment loans are personal loan sanctioned against collateral or security. In other words, you pledge an asset to your lender when you opt for a secured loan.
Your loan amount depends on the value of the asset you pledged.
3. Check your eligibility for government schemes
The government has rolled out special loan schemes for unemployed people. Some of them are:
- Prime Minister's Rozgar Yojana (PMRY): This scheme aims to provide self-employment opportunities, especially to the educated unemployed youth of the country aged between 18 to 35 years. Under PMRY, you do not need any collateral for loans up to Rs. 1 lakh.
- Pradhan Mantri Mudra Yojana (PMMY) Scheme for Women: Launched in 2015, PMMY allows women to take an unsecured loan to start their own business venture. You can benefit from this scheme through various lenders and NBFCs. The key benefits of this scheme are its affordable personal loan interest rates and long tenure of up to 7 years.
- Agriculture loan for the unemployed: The government provides funds for unemployed agriculture graduates above 22 years of age. You can use this loan for any agricultural project like farming or horticulture.
Types of Loans for Unemployed
Most lenders require proof of income when applying for a personal loan, so it can be challenging to get a loan for an unemployed individual without a steady income source. In such a case, here are the other loans you can consider-
1. Loan against fixed deposit
While fixed deposit is an excellent investment tool to save money for guaranteed returns at low risk, it can also help you meet your financial needs with a loan. Many lenders offer a loan against FD for up to 75-90% of the FD amount.
When you apply for a loan, the FD continues to grow, but the interest on the loan is charged at 1-2% higher than the FD interest you're earning. Moreover, note that you won't be able to withdraw the FD account until you close the loan.
2. Loan against investments
If you have invested in any mutual fund or equity schemes, you can use this investment as a security to get a personal loan. Since now you're applying for a secured loan by pledging collateral, you can fetch slightly lower interest rates than unsecured loans.
However, like a loan against FDs, you cannot sell the investment before repaying the loan.
3. Loan against property
You can also apply for a loan against a property you own. This loan against property will allow you to avail a higher loan amount by pledging the property as a security.
4. Loan against rent receivables If you own a commercial or residential property that collects rent, you can use these rent receivables as a security to apply for a loan. This loan typically involves an agreement between the lender, tenants, and yourself, where the tenants can pay the future rentals directly to the lender.
Things to consider
- Before you proceed, carefully ponder why you want to take a loan. Availing of a loan is a financial commitment. Hence, choose a lender that meets your needs.
- Always borrow an amount that you can repay timely.
- Plan your loan repayment by estimating your EMI and interest payable in advance using a personal loan EMI calculator. Enter the amount you would like to borrow, your lenders' interest rates, and the time you will take to repay the loan. The tool will calculate the EMI you will have to pay.
- Maintain a good credit score, ideally over 750, to bag lower interest rates.
Additional Read: 5 Simple Ways To Manage Your Personal Loan EMIs
In conclusion
Do you need an affordable loan for personal use? Turn to Tata Capital. We help you with multi-purpose loans at attractive personal loan interest rates and offer flexible repayment options. Visit our website to learn more.
FAQs on Loan for Unemployed
Can I get a loan without a job?
Yes, you can apply for an instant loan without a job. However, without a steady income source, you can apply for a secured loan or get a co-signer who meets the lender's loan eligibility criteria.
Which loan is best for the unemployed?
As an unemployed individual, if you're looking for a small loan, you can apply for secured loans, personal loans with a co-signer, and loans under government schemes.
What is the small loan for unemployment?
Small instant personal loans can be availed by unemployed individuals, often with higher interest rates. Alternatively, if you have invested in shares or mutual funds or own a property, you can use these assets as collateral to apply for a secured personal loan.
Can a housewife apply for a loan?
Housewives can apply for loans by pledging collateral such as gold, applying with a co-signer, or providing proof of alternative income sources.
Is collateral needed for a loan if you're unemployed?
If you're applying for a loan as an unemployed individual, lenders typically require you to pledge collateral to reduce the lender's risk and approve the loan.
16 July 2024
6 mins read
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