Getting a loan for an individual with regular employment or business is an elongated process and any applicant has to go through it. The only relief is the probability of getting a loan sanctioned for an employed individual is easy. The race is more challenging for an unemployed individual who is in dire need of money but has to knock several doors to avail it.
Not all banks offer loans to non-salaried individuals since the guarantee of repayment is bleak. There are high chances of default and therefore risk to the lender. The loan for unemployed individuals comes with certain terms and conditions as there is high risk involved in such applications.
Loan to the unemployed comes with a higher rate of interest for the obvious reasons. This loan application needs a cosigner who will be held in case the applicant defaults. The cosigner is responsible for repayment in case of default. Onboarding the cosigner in such loans increases the chances of loan approval.
Different forms of loans for Non-Salaried
There are different forms in which loans for non-salaried loans are offered.
- Same day loans – Looks impossible to believe but some banks offer same day loans for a shorter period and high-interest rates. These loans are offered to individuals above 18 years of age with no employment.
- Unsecured loans – Though offered with high-interest rates, these loans are also a safe option as it doesn’t take any of your assets. You can improve your chances of approval by onboarding a cosigner.
- No credit check – These loans do not check credit which is in a way favorable for the unemployed individual applying for a loan.
- Long term loans – Long term loans can be availed by pledging an asset. It serves as a security for the lender.
Read More: How to apply for a Small Loan in India?
Benefits of loans for Non-Salaried
- It is an opportunity for the unemployed to get the loan.
- Most of the loan offers do not require collaterals.
- There are chances to get the same day loans to meet the emergency cash requirement.
- Tenure is flexible.
- This loan is offered in various forms understanding the requirements of the applicants.
There several schemes by the government offering loans to the unemployed:
Farmers can avail of agricultural loans where they can avail of financial aid to contribute or enhance their agricultural yields.
Rozgar Yojana – The idea behind the scheme is to provide employment to the unemployed. Financial aid can be used to start up a business or invest in some industry.
Loan Subsidies – The government of some states offers loan subsidies to the unemployed. The banks decide the collateral for such subsidies.
Unfortunate unemployment scenarios can be dealt with such loans but do not misuse it like the one in need should get it first and avail it in order to put to the right use.
