Loans for unemployed individuals, often referred to as "unemployment loans" or "personal loans for the unemployed," are financial products designed to provide temporary financial assistance to those without a regular income due to unemployment. However, obtaining traditional loans while unemployed can be challenging, as lenders typically require proof of income and employment stability.
To get a loan without a job, you can check for the government schemes, or get a loan against fd, or any other asset. You can also get a loan with a good CIBIL score. So, go through the page to check all the possible ways to get a loan as jobless or as unemployed.
Loans For Unemployed Interest Rates
When exploring loans for the unemployed, comparing lenders and their associated interest rates is crucial for making informed financial decisions. Interest rates significantly impact the total cost of borrowing.
| Traditional banks | 15-25% p.a |
| Non-banking financial companies (NBFCs) | 12-20% p.a. |
| Microfinance institutions (MFIs) | 20-35% p.a. |
Multipurpose Loans for Unemployed
While opting for a personal loan, it is essential to understand the interest rates on loans for housewives. Beside the interest rate, there are some extra expenses like processing fees and pre-closure costs, which may have a big impact on your repayment responsibilities.
Check out the interest rates & charges for housewives loans in the table below:
- Student Loan (personal loan for students): loans for unemployed students are financial aid specifically designed for individuals pursuing higher education, from vocational certifications to postgraduate degrees. They offer a way to access the funds needed for tuition fees, living expenses, and other educational costs without depleting personal savings or burdening families.
- Pension Loan: Pension loans are specifically designed for retired individuals receiving regular pension income. They leverage your stable income stream to offer secured loans with attractive features like:
- Loan for Women/ Housewife: Financial independence is a key element of empowerment for women, allowing them to pursue their dreams and goals. Loans for unemployed housewives are designed to bridge the gap between potential and opportunity, helping them achieve personal development and household well-being.
- Aadhaar Card Loan: Aadhaar card loans leverage your unique identification number for easy access to credit. Personal loans are approved and disbursed based on your Aadhaar information. These loans have a streamlined process with minimal paperwork and faster approvals.
- Small Cash Loans: Small cash loans, often called instant loans are loans given in small amounts to fulfill urgent financial requirements, these loans do not require any collateral and can be accessed quickly and easily without much documentation.
- Loan Against FD: A loan against FD, also known as Overdraft against FD, allows you to borrow money using your fixed deposit (FD) as collateral.
- Loan Against Agricultural Land: A loan against agricultural land, also known as an agricultural land loan or farm land loan, is a type of secured loan where you use your own farmland as collateral to borrow money.
- Startup Loan/ Business Loan: Starting a business is an exciting venture, but securing the necessary funding can be a challenging aspect. The startup loans and business loans, can act as your financial lifelines for turning your entrepreneurial vision into reality.
- Loan Against Property: As a secured loan option, you can also avail a loan against your property as an unemployed. With your property as an collateral, you can avail loan at competitive interest rates. Besides, you can continue to use your property to generate income. Not just that, you also enjoy the benefits of appreciation in your property prices.
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Loans For Unemployed Processing Fee, Charges & Penalties
Securing a loan while unemployed can offer temporary relief, but it's crucial to understand the potential costs beyond just the interest rate. Processing fees, charges, and penalties can significantly impact your loan repayment burden.
Here's a breakdown of some common fees and charges:
| Processing fee | Up to 3% |
| Interest on overdue EMIs | Starting at 2% p.m |
| Foreclosure | Up to 4% |
| Cheque Bounce | Rs 500 (per bounce) (approx) |
Types of Loans Available For Unemployed in India
Securing loans without a regular source of income can be challenging, but some financial options cater specifically to the needs of unemployed individuals. Here are types of loans available for the unemployed in India:
Pradhan Mantri Rojgar Yojana (PMRY): Offers loans up to Rs. 25 lakh for individuals aged 18-35 to start businesses. No collateral required for loans up to Rs. 1 lakh.
Pradhan Mantri Mudra Yojana: Get Mudra Loans up to Rs. 10 lakh for non-farm, non-corporate entities for business ventures.
Loan against Property (LAP): Use your property as collateral to secure a loan for various purposes.
Gold Loan: Pledge your gold jewelry for quick cash at lower interest rates compared to unsecured loans.
Microfinance loans: Small loan amounts (below Rs. 10,000) from microfinance institutions for specific needs like emergency medical bills.
Personal loans from NBFCs: Some Non-Banking Financial Companies offer personal loans to unemployed individuals with good credit history or alternative income sources.
Education loans: Finance upskilling or reskilling courses to improve your employability and future income potential. Considering a loan for education can help.
Secured Loans: Secured loans leverage collateral (assets) to reduce lender risk, often leading to lower interest rates, but involve the risk of losing the collateral if you default.
Besides all these option, PayDay loans can be considered if you cna show your income proof. Payday loans are a type of short-term loan given based on your income and credit profile. It can be a goto loan solution for employed individuals. However, not very suitable for unemployed individuals. These are short-term financial solutions designed to address immediate needs with quick approval and disbursement. These Payday loans are ideal for financial emergencies because of their flexibility and ease of getting funds.
Government Schemes For Unemployed People in India
In India, while unemployment presents challenges, several government schemes offer support and opportunities for individuals seeking work or financial assistance. Here are some key schemes:
Deen Dayal Upadhyay Gramin Kaushalya Yojana (DDU-GKY): Provides skill training to rural youth (15-35 years) in 40+ sectors, enhancing their employability.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Offers skill training programs across various sectors for individuals (18-65 years), improving their job prospects.
Pradhan Mantri Rojgar Yojana (PMRY): Offers subsidised loans (up to Rs. 25 lakh) for individuals (18-35 years) to start micro-enterprises.
Pradhan Mantri Mudra Yojana: Provides loans (up to Rs. 10 lakh) for non-farm, non-corporate businesses, encouraging self-employment and micro-enterprises.
Unemployment Allowance: States like Kerala offer unemployment allowance schemes for registered unemployed individuals (certain eligibility criteria apply).
Atal Pension Yojana: Encourages voluntary monthly contributions by unorganized sector workers (18-40 years) for guaranteed monthly pension after retirement.
Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM): Similar to Atal Pension Yojana, but specifically for unorganized sector workers (aged 18-40 years) with monthly income below Rs. 15,000.
Aajeevika Mission: Supports rural livelihoods through Self Help Groups (SHGs) and promotes micro-enterprises among women.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Provides guaranteed rural employment for at least 100 days in a year to one member of every household.
Eligibility Criteria For Unemployed Loans
Getting a loan while unemployed can be tricky, and lenders often have specific criteria to assess your ability to repay. Here's a breakdown of potential eligibility factors:
- Age: 18 years old or above.
- Citizenship: Proof of Indian citizenship or residency might be required
- Credit history: A good credit history of 750 or above
- Income: Might be asked to show a different source of income, or income from another family member.
- Some lenders might require collateral like your car or house to secure the loan, mitigating their risk.
- Debt-to-income ratio. High ratios (above 40%) can lower your chances of approval.
- Some lenders offer specific loans for unemployed individuals, like starting a business or education needs.
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EMI Calculation for Unemployed Loan
You can use the EMI calculator for a quick calculation of your EMIs and plan your budget accordingly. Just enter the loan amount, interest rate and the tenure to check the EMI.
To calculate the loan EMI manually you can use the following formula:
EMI = PR(1+R)N(1+R)N- 1
Where,
- EMI stands for equated monthly instalments
- P is the principal amount.
- R is the rate of interest.
- N is the tenure in months.
For example, let's say you take a loan of ₹90,000 with an interest rate of 8% for 8 years. Using the formula, your EMI would be:
P = Rs 90,000.
R = 8%/ 12, i.e., = 0.08/ 12 = 0.00666 (approx)
N (in months) = 96
Now using the formula;
EMI= 900000.00666 (1+0.00666 )96(1+0.00666 )96- 1
EMI= 900000.00666 1.8920.892
Your monthly EMI will be around ₹1,272 (approx)
Documents Required For Unemployed Loans
While "unemployment loans with no job verification" might be enticing, verifying income and employment remains important for most lenders. Documentation requirements for unemployed loans can vary according to various lenders. Here's a breakdown of few documents that are required:
- Proof of Identity: PAN card, Aadhaar card, voter ID card, passport, driving license.
- Proof of Address: Aadhaar card, voter ID card, passport, driving license, utility bills, bank statements.
- Recent income tax returns (ITRs) if you recently had income from self-employment, freelance work, or investments.
- Bank statements showcasing regular deposits from alternative sources like rental income, pension, or fixed deposits.
- Proof of investments or assets like property or fixed deposits that can serve as collateral.
- Loan purpose documentation: Depending on the loan purpose, lenders might require documents like medical bills, education fee receipts, business plans, or purchase agreements.
- Guarantor documents: If a guarantor is involved, their identity and income proof might be required.
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Tips to Choose the Right Loan for Your Needs
Choosing the right loan can be crucial for achieving your financial goals without burdening yourself with overwhelming debt. Here are some tips to help you navigate the process effectively:
Assess Your Needs: Clearly define the purpose of the loan. Whether it's for a home, education, or an emergency, understanding your needs will guide you in choosing the most suitable loan type.
Analyze your income and expenses: Create a budget to understand your existing financial commitments and ensure you can comfortably afford the loan repayments.
Check your credit score: Having a good credit score can qualify you for lower interest rates. Consider repairing your credit if necessary.
Understand Different Loan Types: Research various types of loans available, such as personal loans, home loans, auto loans, etc. Each type has specific features and may be tailored to different financial goals.
Consider Repayment Terms: Understand the repayment terms, including the loan tenure and monthly installment amounts. Choose terms that fit your budget and financial goals.
Top Lenders Providing Personal Loans
| Banks/NBFCs | Interest Rates(p.a) | Processing Fees |
|---|---|---|
| SBI | 11.00% to 14% | Up to 1.50% |
| HDFC | 10.05% to 21% | 0.50% ( Rs 1,999 - Rs 25,000) |
| ICICI | 10.75% onwards | 2.50% |
| Axis | 10.49% onwards | 1% |
| Tata Capital | 10.99% onwards | 1% |
| Induslnd Bank | 10.49% onwards | Up to 3% of sanctioned amount |
| PaySense | 16.80% onwards | Up to 2.5% + GST or Rs 500 |
| Bajaj Finserv | 11.00% onwards | Up to 3.93% |
| Money View | 15.96% onwards | 2% + GST |
| Cashe | 27.00% onwards | Up to 3% |
| Phocket | Up to 24% | - |
| Fibe | 16% onwards | 2% onwards + GST |
| Muthoot Finance | 12% onwards | Up to 2.5% |
| Loanbaba | 10.99% onwards | Up to 2% |
| MoneyTap | 12.96% onwards | Up to 4.2% + Tax |
| KreditBee | 12.25% - 30.00% | ₹130 to ₹16,800 |
| mPokket | 24% onwards | ₹50 to ₹200 + 18% GST |
| Upwards | 9% onwards | Up to 4% + Tax |
| Ambit Finvest | - | - |
| Mcapital | 18% onwards | 2% onwards + GST |
| Lendingkart | 15% onwards | 2 to 5% of the loan amount |
| Prefr | Up to 36% | Up to 5% |
| Incred | 16% - 36% p.a. | 3% of loan amount |
| NIRA | 24% onwards | Rs. 350 + GST (maximum 2% loan amount) |
| L&T | 12.00% p.a onwards | Up to 3% + GST |
| Zype | Up to 36% p.a | 2 to 6% |
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Note: These rates are indicative and subject to change. Always check with the bank for the most up-to-date information before making any investment decisions.Steps to Apply for Loans as Unemployed
You can apply for a personal loan on Buddy loan. With Buddy loan you can apply for a loan with top verified lenders. You can can get your loan approved from the best lenders as per your eligibility. Check the steps to apply for a instant loan from below:
Step 1 - Visit buddyloan.com or Download & install Buddy Loan app.
Step 2 - Fill out the application form, including the loan amount, the tenure in months, and contact details.
Step 3 - Fill out the following personal details where required:
Step 4 - Choose the employment type (Salaried, Self-Employed, or Student) and the salary mode (bank or cash).
Step 5 - Enter your work details (Including company name, years of service and Designation)
Step 6 - Enter your personal details (Including Full Name, PAN, address DOB & Gender)
Step 7 - Provide your communication address, and income details and Click the ‘Submit’ button.
Repayment Options For Unemployed Loans
Repaying a loan while unemployed can be challenging, but with careful planning and flexibility, you can navigate it effectively. Here are some options to consider:
Standard Installments: This involves fixed monthly payments spread over the loan term, offering predictability and stability.
Extended Repayment Term: Some lenders might offer to extend the loan term, reducing your monthly installments but resulting in longer interest payments. This provides temporary relief with lower immediate payments but increases the overall loan cost.
Deferred Repayment: Some lenders may offer a deferred repayment option, allowing borrowers to postpone making payments for a specified period. However, interest may continue to accrue during this period.
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Frequently Asked Questions
Same-day loans offer fast cash (often at high cost) with quick approval and funding, but come with shorter repayment terms and potentially high interest rates.
Yes, it's possible to get a loan and receive funds on the same day you apply with same-day loans. These loans offer quick access to cash, often within hours of approval.
Yes, several lenders and financial institutions offer same-day loans. Banks like HDFC, Bank of baroda and NBFCs like moneyview, fibe, mPokket etc.
Same day loan applications are typically quick and online, with approvals based on basic info and sometimes credit checks, leading to potential funding within hours.
Generally, no, receiving a same-day loan isn't taxable income, but interest payments and potential loan forgiveness may have tax implications.
Non-payment of a same-day loan can entail serious consequences, both immediate and long-term. It triggers late fees, credit score damage, collections, and potentially lawsuits and even bankruptcy.
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