How to Secure a Loan for Unemployed Without Income Proof?

When it comes to securing a loan, having a steady income is often seen as a must. Lenders usually want to ensure you have the means to repay before handing over any funds. 

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But what if you are between jobs or currently out of work? Don’t stress! There are personal loan options designed specifically for individuals in your situation. 

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While it may seem challenging, it is still possible to get a loan even without a regular paycheck. Let’s explore how to secure a loan for unemployed. 

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Types of Loans Available for Unemployed Professionals

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Being an unemployed individual, you can avail of different types of loans. Here are some common types of loans for unemployed professionals:

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Secured Personal Loans

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Even without a stable source of income, individuals with a good credit score can still apply for a personal loan. 

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Timely repayments and a clean record of no defaults can increase your chances of approval. 

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Additionally, regardless of your employment status, securing a personal loan becomes easier if you are willing to offer collateral such as property or cash. 

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Government or Specialised Schemes

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You may also utilise unemployed loan schemes from the government if you do not have a strong income source. 

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The Prime Minister’s Rozgar Yojana is one of the best schemes to get loans for unemployed students. It offers loans to the unemployed youths of India aged between 18 and 35 years.

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The Pradhan Mantri Mudra Yojana (PMMY) provides an excellent opportunity for Indian women with no income to access loans. 

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These loans, with tenures of up to 7 years, are designed to empower women by enabling them to start new businesses and become financially independent.

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The Government also offers an agricultural loan for unemployed people to promote entrepreneurship in the agriculture sector. Youths above 22 years of age can use this loan to start new ventures.

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Other Loan Options for Unemployed

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Since most lenders require income proof, it will be challenging for individuals to avail the loan who are unemployed. Here are some other options for loans for unemployed individuals:

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1. Loan Against Investments

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Your investments in mutual funds or other equities can be used as a security to get a personal loan. You can get slightly low interest rates as you are using collateral for a secured loan.  

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2. Loan Against Fixed Deposit

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Many lenders also offer loans against fixed deposits up to 75-80% of the total amount. The interest on the loan will be charged at 1-2% more than the FD interest you are earning currently when you apply for a loan.

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3. Loan Against Property

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A loan against property is another option for unemployed individuals looking to secure a loan. By pledging your property as collateral, you can access a higher loan amount, even without a steady income. 

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Banks decide loan applications for individuals based on their income and property value since unemployed individuals like freelancers cannot provide their income proof.

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Factors to Consider Before Applying for a Loan for Unemployed

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There are different types of personal loans available for unemployed individuals. You must consider some essential factors before applying for such loans. Below are the factors that you should consider while having no stable income:

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• You must apply for a personal loan with an employed co-applicant.
• You must avoid defaults on the loan repayment, as it can lead to higher penalties.
• Make sure you apply for a loan you can afford.
• You should have a financial plan to make timely repayments.
• Before opting for a loan as an unemployed individual, it is important to choose a lender who can effectively meet your needs.
• Think carefully about the actual reason for applying for a personal loan.

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How to Apply for Emergency Loan for Unemployed Professionals? 

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Now that you know the factors people must consider while opting for a loan for unemployed individuals, you are all set to proceed with the application process. Here are the steps you can follow to apply for a personal loan without having employment:

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Step 1: Check Your Credit Score

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Check your credit score to ensure you are eligible for a personal loan, even if you are unemployed. While applying for a loan, the lender can approve your loan if you have a good credit score.

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Step 2: Consider a Co-Signer

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Manage someone who has a good credit score to co-sign the loan agreement with you. You may be liable to pay lower interest.

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Step 3: Gather Your Essential Personal Details

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Personal details verification is a common procedure in any loan application process. Individuals need to provide their personal information such as name, contact details, date of birth and other details.

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Lenders generally require additional documents, such as collateral papers and ID proof, when offering loans for unemployed individuals. These documents help lenders verify the borrower’s identity and assess their eligibility to repay the loan.

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Step 4: Apply for a Loan

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After choosing a lender and gathering all the necessary documents, you can submit your loan application. Make sure to provide accurate details and be prepared to respond to any further queries the lender might have.

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Risks Associated with Loan for Unemployed Individuals

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The options of loans for unemployed individuals can bring opportunities as well as risks for borrowers. Here are the risks that you must address as an unemployed loan applicant:

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• High Interest Rates: Personal loans for unemployed individuals charge a higher rate of interest due to the involved risks of not having a regular income.

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• Shorter Repayment Tenure: Lenders offer these types of loans with a shorter repayment time which increases the monthly expenditure of the borrowers.

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• Smaller Loan Amount: Due to the higher risk of timely repayment for the lender, these loans are generally offered in smaller amounts compared to regular personal loans.

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The Bottom Line

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There are several options for loan for unemployed individuals, offering flexibility and a chance to get the financial support you need. 

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Whether it is applying jointly with a co-applicant, using assets like Fixed Deposits as collateral or exploring government schemes, there are ways to secure a loan even without a stable income. The key is to choose the right option for your situation. 

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To make the process even easier, consider downloading the Jar app, where you can access instant loans up to ₹5 lakh in no time!

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Frequently Asked Questions

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1. How to get 20,000 rupees urgently without a salary?

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Getting ₹20,000 urgently without salary can be possible if you have a credit score more than 750. Simply apply for a personal or instant loan and provide collateral as a security. 

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2. Can I get a personal loan without income proof?

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Yes, it is possible to get a personal loan without providing income proof. If your credit score is above 750, lenders may consider it as an alternative to income documents.

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