In today's unsteady economy, the loss of a job can happen unexpectedly, leaving many individuals in a difficult financial situation. Without a steady source of income, getting approved for a personal loan can seem like a challenging task. However, it is possible to get a personal loan for unemployed individuals with some lenders in India. In this blog, we will discuss the different types of personal loans available for the unemployed individuals and provide tips on increasing the chances of getting approved.
Key Highlights
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A Step-by-Step Process to Apply for a Personal Loan for Unemployed
1. Check the Credit Score
Having a high credit score can boost the borrower’s chances of being eligible for a personal loan, even if they are unemployed. Hence, check the credit report and credit score before applying.
2. Consider a Co-signer or Get a Guarantor
Get a reliable friend or relative who is willing to co-sign the loan. This enhances the chances of approval and enables you to get better interest rates.
3. Gather Required Documents
In order to apply for a personal loan, you will need to provide documentation like ID, proof of residence and bank statements. Be sure to have all necessary documents ready when applying.
4. Apply for the Loan
Once you've found a lender and gathered all the necessary documents, you can apply for the loan. Make sure to provide accurate and truthful information and be prepared to answer any additional questions the lender may have.
Check Out How People with No Income Can Avail a Personal loan
There are many options available to get instant personal loan for unemployed housewife. The popular ones are:
1. Secured loans
Secured unemployed loans are personal loans offered when you pledge your asset to the lender. A borrower without a steady source of income can opt for these secured loans. Since these loans are sanctioned against collateral, they can be availed regardless of employment status.
2. Government Schemes
The Indian government has introduced three schemes to promote self-employment by providing instant personal loans for jobless individuals.
1. Prime Minister’s Rozgar Yojana(PMRY)
The Prime Minister’s Rozgar Yojana targets educated youth aged between 18 to 35 years, offering loans up to Rs. 1 lakh without collateral.
2. Pradhan Mantri Mudra Yojana (PMMY)
Pradhan Mantri Mudra Yojana (PMMY) Scheme for Women, launched in 2015, provides affordable personal loans with competitive interest rates and long tenures of up to 7 years to help women start their own business ventures. These schemes are available through various lenders and NBFCs.
c. Agriculture Loan
The Government of India offers an Agricultural Loan scheme to promote entrepreneurship in the agriculture sector. Unemployed youth aged above 22 years can apply for this loan to start their own ventures. This scheme has tie-ups with multiple banks and financial institutions.
Things to Consider When Applying for Personal Loans
- Consider your reasons carefully for taking out a loan before proceeding, as it represents a significant financial commitment.
- Never borrow more than you can realistically afford to repay.
- To plan your repayment strategy, you can use a personal loan EMI calculator by Shriram Finance to estimate the EMI and interest payable.
- Furthermore, it is recommended to maintain a strong credit score, ideally above 750, to secure more favourable interest rates.
- Check for hidden fees or charges.
- Understand the consequences of defaulting on the loan.
How to Apply for Personal Loan for Unemployed Students?
1. Verify Personal Details
Before applying for a loan, the borrower will need to provide personal information such as name, contact details, date of birth, etc. Lenders will use this information to verify the borrower’s identity and assess their eligibility for a loan. In case of unemployment, the borrower might be required to provide additional documents like details of collateral, ID proof, etc.
2. Choose the Loan Amount and Tenure
Once your personal details are verified, you can choose the loan amount you want to borrow and the tenure for repayment. The loan amount and tenure will depend on the value of the collateral. The borrower should carefully consider their repayment capacity and choose an amount and tenure that they can comfortably manage.
3. Receive the Loan Amount in Bank Account
Once the borrower has completed the application process, the loan is approved and the loan amount will be disbursed to their bank account. The time taken for disbursement may vary depending on the lender and the mode of payment. Shriram Finance offers quick loan disbursals within 72 hours of approval.
To Summarise
A personal loan can be a valuable resource for individuals who find themselves unemployed and in need of financial assistance. However, it is essential to consider all options carefully and to only borrow what is truly necessary. With responsible financial planning and timely repayments, a personal loan can provide the necessary support to help individuals get back on their feet during challenging times.
If you're looking for a reliable way to meet your financial needs, consider exploring the Shriram Personal Loan. With competitive interest rates and flexible repayment options, this personal loan product is designed to suit all your requirements. The loan process is also hassle-free and paperless, making it easy to apply for and obtain.
FAQs:
1. Who is not eligible for a personal loan?
Several factors can render a person ineligible for a personal loan. Some of these individuals can be:
- Borrowers with a poor credit score
- Borrowers with low-income or unstable income
- Borrowers under the age of 21
- Borrowers with a lack of collateral or guarantor
- Borrowers with a negative credit history or defaults on previous loans
2. Why are personal loans rejected?
Personal loans can be rejected for various reasons like:
- High debt-to-income ratio
- Unverifiable information provided by the borrower
- Incomplete documentation or incorrect details provided in the application
- Existing loans or debts that the borrower is struggling to repay
- The collateral offered is deemed insufficient or unsatisfactory by the lender.
3. Can I get a personal loan with a private job?
Yes, you can get a personal loan with a private job. When determining a borrower's eligibility for a personal loan, lenders largely consider their income and the security of their employment. Hence, you might be qualified for a personal loan if you have a consistent income source, a high credit score and a low debt-to-income ratio.
4. Which type of loan does not need income proof?
Most loans that are secured by collateral, like a car loan or a home equity loan, do not require proof of income. Since these loans are backed by collateral, the lender may not require proof of income because, in the event of default, they can collect the loan amount by seizing the collateral.
