If you have a consistent source of income, getting a personal loan is simple. This is one of the most crucial deciding elements since a loan can only be repaid if you have a regular source of income. A personal loan application is accepted or refused based on your income. So, how can someone get a loan while they are unemployed? Is this to say that a jobless person won’t be able to get a loan?
Many lenders may give personal loans to applicants who do not have a steady job. Interest rates, loan terms, and other factors differ from those available to wage workers. These factors, however, will not prevent you from obtaining financing from a variety of lenders. Secured loans, payday loans, and government personal loan programmes for the jobless, to mention a few, are examples of such loans.
Types of Loans for the Unemployed in India
- Secured Loans:
For people who are in-between jobs or are currently unemployed, having no source of income, taking up a secured personal loan is one of the best decisions. This is because it helps you to meet a variety of financial demands.
A security or collateral can be used to secure such a loan. You can apply for a secured loan even if you are working but don’t not have a consistent source of income to show the lender. The lender can gain further trust in the applicant by providing collateral/security, even if there is no source of income. In such instances, the applicant’s profile is deemed less hazardous, and the lender can have faith in the applicant’s ability to repay the loan.
- Unsecured Loans:
You can obtain credit without providing any asset or security with this sort of loan. These loans have higher interest rates and may be obtained quickly by securing a guarantor.
- Gold Loan:
If an unemployed individual is a housewife or a homemaker, he or she can even use gold jewellery as collateral to get a loan. There are numerous lenders who will provide you with this facility at a low interest rate in order to meet your demands.
- Payday Loan:
A payday loan might be a suitable unemployed loan choice if you are unemployed currently but anticipate finding work shortly.
Government Loan Schemes for the Unemployed
- Prime Minister Rozgar Yojana
The government of India gives loans to jobless people so that they can establish their own business. Anyone who has completed the eighth grade is able to apply for a loan under this programme. Unemployed people between the ages of 18 and 35 can apply for a loan of up to Rs. 5 lakhs. In this instance, however, the beneficiary’s income, as well as the income of his or her parents, should not exceed Rs. 1 lakh per year.
- Loan Subsidy Scheme
The state government will subsidise 25 percent of the loan amount under this programme. This programme, however, is not offered in all states.
- Agriculture Loan
These loans are available to unemployed people who are engaged in the agricultural industry. Although, the person must be at least 22 years old to avail such a loan.
Things to Consider Before Applying for a Personal Loan
If you are out of a job and want to apply for a personal loan, there are a few things you should think through before making your decision:
- The advertising interest rate may differ from the final rate given, and the bank has the right to change it at any time.
- Remember, if you default on one of these loans, you might face steep penalties.
- It is advisable to calculate your EMI using an online EMI calculator to find out how much you’ll have to pay each month before you make your decision
- Always make sure that you have enough money to pay your bills on time.
In Conclusion
Despite the fact that you may receive a loan even if you are unemployed, it is always vital to evaluate why you need a loan. Taking out a loan means you’ll be accumulating debt, which you won’t be able to pay off if you’re jobless. As a result, you must take out a loan that you can return on time, and you must be explicit about the loan amount and payback amount.