Loan for Unemployed
There are lenders who offer personal loans even if you don't have a stable job. Of course, the interest rate, loan tenure and other factors are different from loans offered to income earners, but that won't stop you get financing from various lenders.
You can get such loans in the form of secured loans, payday loans and government personal loan schemes for the unemployed, to name a few.
Compare Best Personal Loans for the Unemployed
Banks/Lenders | Interest Rate (p.a.) | Loan amount |
18% p.a. | Up to Rs.5 lakh | |
SmartCoin | 18% p.a. | Up to Rs.5 lakh Rs.1,000 to Rs.2 lakh |
11.30% p.a. | Rs.2.5 lakh to Rs.14 lakh | |
12.75% | Rs.25,000 to Rs.10 lakh | |
10.85% p.a. | Up to Rs.10 lakh | |
Based on the scheme specifications | Up to Rs.10 lakh | |
Varies from bank to bank | Up to Rs.10 lakh |
How to Apply for a Loan for the Unemployed?
You can choose any of the below options to apply:
- Through the lender's website or mobile application
- Directly through the bank's branch
List of Government Loan Schemes for Unemployed in India
- Prime Ministers Rozgar Yojana- This scheme has been designed especially for the unemployed.The main of the scheme is to provide employment to the unemployed by providing them financial resources to start their own ventures. The loan is available to any youth who is educated up to standard grade 8 in India. The loan is of composite nature and a loan of Rs.2 lakh and a loan of Rs.5 lakh is advanced for business sector and industry sector respectively.
- Loan subsidy for unemployed youth- Tamil Nadu government has a scheme for the unemployed called NEEDS(New Entrepreneur and Enterprise Development scheme).Under this scheme the state government provides 25% subsidy for loans for unemployed youth who are graduates. Collateral for the loan through banks is decided by the bank. The infrastructure cost of the project can’t exceed Rs.75 lakh.
- Cash loans for the unemployed by the Government of West Bengal- The West Bengal government introduced the West Bengal Karma Sathi Prakalpa Scheme 2020 aimed at offering financial aid to aspiring entrepreneurs. The scheme aims to empower self-employed youth to become employers and generate employment opportunities. With a target of providing loans to one lakh youths annually, the state government aims to facilitate loans of up to Rs.2 lakh per beneficiary under this scheme.
- Agriculture loan for the unemployed- The government has collaborated with many banks to provide financial resources for unemployed agriculture graduates. This loan can be utilised for any kind of agricultural projects. Any unemployed agricultural graduate above the age of 22 years old is eligible for this loan.
Secured unemployment loans- Secured unemployment loans are sanctioned against a collateral or security. In this loan scheme, the borrower pledges an asset to the lender based on which the lender sanctions the loan. The loan amount depends on the value of the asset pledged.
Private Loan Providers: LazyPay
LazyPay operates as a part of PayU offering instant personal financing facilities to customers. You can get a loan of up to Rs.5 lakh with LazyPay. In order to get a loan, you need to download the LazyPay app and apply.
Benefits/Key highlights
- Instant approval
- Minimal documentation
- Flexible repayment options
Private Loan Providers: SmartCoin
SmartCoin is an app-based money lending platform targetted towards the middle- and lower-income strata. The interest rates offered by the lender are on the higher side because of the short loan tenure.
Benefits/Key highlights
- Paperless application process
- Quick loan disbursal
- Minimal documentation
- Repeat loan facility available
State Bank of India
State Bank of India offers SBI Pension Loan to Central or State Government or Defence pensioners who draw their pension from any of the SBI branches.
Benefits/Key highlights
- High quantum of financing
- Flexible repayment tenures
- Competitive interest rates
Punjab National Bank
Punjab National Bank offers personal loans to pensioners who draw their pension through any of PNB's branches. This loan can be taken to meet the medical expenses of pensioners during the time when they need it most. Borrowers can avail a loan multiple times based on the adjustment of the previous loan.
Benefits/Key highlights
- High quantum of financing
- Attractive interest rates
- Flexible tenures
Other than the aforementioned loan schemes, you can also apply for the following schemes:
Bank of India
Bank of India offers BOI Star Pensioner Loan Scheme to a retired employee who draws a regular pension through the bank branch.
Benefits/Key highlights
- High quantum of finance
- One of the lowest interest rates on personal loans in India
- Minimal documentation for processing
Prime Minister's Rozgar Yojana (PMRY)
This scheme aims to provide self-employment opportunities to the educated unemployed youth of the country. The scheme has undergone quite a few modifications over the years, including the relaxation of norms in the north-east region.
Benefits
- Loan for the unemployed between the age of 18 and 35 years
- No collateral required for loans up to Rs.1 lakh
- Preference will be given to women and weaker sections of the society, including SC, ST, or OBC applicants
Pradhan Mantri Mudra Yojana (PMMY) Scheme for Women
This is a loan scheme launched by the Government of India in 2015. This scheme allows women to avail a loan so that they can start a business venture of their own. There are various lenders and NBFCs in India who offer this particular loan scheme to its customers.
Benefits of Loans for the Unemployed
- Loans are available under three categories - Shishu, Kishore, and Tarun
- No collateral or security is required
- Rates of interest levied is affordable
- The repayment tenure under this particular loan scheme may go up to 7 years
- A woman entrepreneur may avail this loan for working capital requirements
Penalties & Internal Charges for Unemployed Loans
State Bank of India Pension Loan
Processing fee | Waiver on processing fee till 31 January 2022 |
Prepayment charges | 3% of the prepaid loan amount |
Punjab National Bank Personal Loan to Pensioners
Processing fee | Nil |
Prepayment charges | Nil |
Documentation charges | Rs.500 |
Bank of India Star Pensioner Loan Scheme
Processing fee | Up to 2% of the loan amount |
Prepayment charges | Nil |
Mudra loan scheme for Women
Processing fee | At the discretion of the lender |
Prepayment charges | May differ from lender to lender |
Eligibility:You need to be a minimum of 18 years of age to apply for such loans.
Documents Required for Loan for the Unemployed
The documents you need to provide may include:
- Residential proof
- Age proof
- ID card
- PAN card
- Aadhaar
FAQs on Loans for Unemployed
- How important is my Credit Score if I am looking to avail a loan for unemployed?
Your credit score will play an extremely important role in you getting a loan. If you are unemployed, your credit score becomes extremely important. Higher your credit score, better your chances of getting a loan. There are lenders in India who do offer loans even if you have a low credit score. However, in these cases, the minimum credit score you may have to maintain is around 600. The credit score requirement will vary from lenders to lenders.
- I want a personal loan. Should I get a co-applicant?
Yes, since the bank may not be willing to offer you a loan if you are unemployed. The bank takes into consideration your occupation and annual income as it helps them determine the rate of interest, they should levy on your loan amount and whether you will be able to repay the loan back in time.
- Are there loans which I can avail against collateral?
Yes, there are loans which you can avail against collaterals. For example, if you own a property, then you can avail a personal loan where you pledge your property as collateral. Similarly, you can pledge your bonds, stocks, and even your FD returns which would help you avail a loan. You can also avail a gold loan if you have gold to pledge as security.
- Should I look to avail a loan from the bank in which I hold an account if I am unemployed?
Regardless of whether you are employed or not, if you are looking for a loan, then it is always recommended that you visit the bank in which you hold an account. Your relationship with your bank goes a long way.
- What are the things I must keep in mind before availing a loan and if I am unemployed?
The first step is to identify the reason why you would need a loan in the first place. Availing a loan means accruing debt which you cannot afford if you are unemployed. Hence, you must avail a loan which you can repay in time and hence you must be specific regarding your loan amount and repayment amount.
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