5 Ways to Get a Personal Loan for Unemployed Individuals
If you have been on the lookout for a Personal Loan, you might have come to understand the significance of a steady income and stable employment to qualify for this credit type. Given that Personal Loans are primarily unsecured, the risk proposition of the lender is comparatively high. To mitigate this risk factor, most banks and online lenders, only offer these loans to individuals who can:
- Furnish proof of employment
- Offer proof of Income, through Salary Slips, ITR, Bank Statements and Profit & Loss Statements
- Have a high credit score, preferably 700 or above
That being said, there are instances when you may wish to apply for a Personal Loan but aren’t currently employed due to one of the following reasons:
- You are a recent graduate, in search of a job or planning to start your own practice or business
- You are between jobs
- You had a job, but are now working towards starting your own business
- You were a business owner, but are currently seeking a job
Thankfully, you need not be disappointed, as there are some tried and tested ways of getting access to Personal Loans for Unemployed individuals, especially if you have been earning at an earlier point in time, and enjoy a decent repayment history. Of course, your IT returns will prove to be of significant help in this regard.
So, without further ado, let us quickly get to some of the promising ways to procure that much desired Personal Loan.
1. Ask Your Friends or Family Members
Yes, this is one of the simplest ways to gain access to some additional funds. Of course, you can only use this approach, if the amount you need is small enough for a friend or relative to lend it to you with ease. While this alternative can save you from paying a hefty interest, you should only go for it, if you are sure of being able to repay the amount in the decided time span. If not, this transaction may harm your personal relationship with the lender.
Then again, if need be, make sure to pay at least some interest to the lender as a way of honouring their helping hand.
2. Leverage Your Relationship With Your Existing Bank
If you enjoyed steady employment earlier, then it will be a great move to seek a loan from the bank where you had your salary account. Your past papers will help the bank understand your earning capability, as well as your financial prowess. If you still have a good credit score, and a reliable plan to get employed at the earliest possible, it will become fairly easy for you to get your loan application approved.
Just in case, a commercial bank turns down your request, you can try approaching a co-operative bank, and leverage their not-so-stringent eligibility criteria for Personal Loans.
3. Approach a Peer To Peer Lending Company
Thanks to the changing times, you can now easily access some additional funds by approaching an established Peer To Peer Lending Company or P2PL. Not only are their eligibility criteria somewhat lenient, but you may also get the credit at a comparatively lower rate of interest. Now, that is what we call a win-win situation.
4. Apply for a Secured Loan
If you have a property under your name, or some other form of an asset such as gold, or a fixed deposit, you can pledge the same in lieu of the loan amount. This is known as a secured Personal Loan. In this case, the bank’s risk proposition decreases drastically, which helps you get the loan at comparatively cheaper rates.
In this case, however, you should be aware of the fact that failure to repay the debt as stipulated will lead the lender to exercise their right of seizing the asset and even selling it off to recoup their loss.
5. Apply for a Loan Against Your Life Insurance Policy
As in the case of a secured Personal Loan, instead of pledging any other asset, you can also apply for a loan against your life insurance policy. In this case as well, the interest rate on your loan will be calculated on the basis of the quantum of your premium, as well as the number of premiums you have already paid. Nevertheless, the rate will be lower as compared to an unsecured loan. However, in this case, the lender will transfer the policy on their name at the time of granting the loan, and will only transfer it back once you have repaid the loan in full.
We hope that one of the above-mentioned ways will help you find the financial assistance that you need. Regardless of the way you choose, make sure to repay the debt in a prompt manner, in order to maintain and even boost your credit score.
Also Read: Can I Get a Loan Without Proof of Income?
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