How to Get a Loan Without a Job?

Traditionally, no matter, the type of loan you applied for, one of the critical requirements that the lenders considered is your job as it assures the lenders that you have the income to repay the borrowed amount. Today, however, many lenders in India offer personal loans even if you don’t have a stable job. Of course, if you don’t have a job, and apply for a loan, the interest rate and other factors would be different than the loan offered to income earners.So, if you are unemployed and are looking to apply for a loan, there are different types of loan schemes that you can consider:

• Gold Loan If you are currently unemployed does not mean you cannot get a loan at all. You can use your gold holding to your advantage and get a loan against it during an emergency. The amount you can borrow depends on the lender’s evaluation of the gold; the lenders generally consider its purity and market value as per the current gold price.
• Loan Against Investments If you have invested in mutual funds, fixed deposits or any other investment schemes, you can leverage its returns potential and avail loan against it. The bonds, shares and stocks in your portfolio can help you get a loan during a financial crisis. You can also avail a loan against your life insurance policy. However, you must know that not all life policies qualify for a loan. So, make sure that you speak to your insurer whether your plan is applicable for a loan before initiating the application process.
• Loan Against Property This is one of the most popular ways of getting a loan during an emergency. The property you own, be it a residential property or a commercial property, you can pledge it with the lender and get immediate cash against it. The amount you can borrow depends on the value of the property; generally, the lenders provide up to 60% of the property’s value.

Essential Tips to Consider While Applying for a Loan When You are Unemployed

• If you are unemployed and apply for any loan, it is paramount that you look for a way to generate income as soon as possible. This could mean doing some freelance work, or signing up for unemployment benefits, etc. It would help if you found a way to get some income to be able to repay the loan.
• Before you apply for a loan, make sure that maintain your credit score as even a small drop in the credit score may significantly affect your approval odds and the loan interest rate. As an unemployed, the last thing you would want is a loan with a higher interest rate.
• When you are applying for a small loan for the unemployed, you must choose the lender carefully. The lenders usually determine the loan amount based on the credit score. So, find a lender that suits your requirement.Also, most lenders decide the amount based on the income and the repayment capacity. Hence, it is paramount to approach the right lender that offers a loan for the unemployed to increase your chances of getting the desired funds.

Now that you are aware of the various loan options and the tips to consider while applying for a small loan for the unemployed, you need not fret during an emergency and choose the right loan option to suit your needs. Also, it would be best if you chalked out a repayment plan as soon as you start earning.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.