Loans for Unemployed

It can be difficult to get credit, especially if you are unemployed. Few lenders offer loans for unemployed as they are nervous about your ability to repay the loan without a steady income. Most lenders want to see a consistent income before approving your loan. So what do you do if you are unemployed and are in need of money?

Loans for Unemployed – What are your options?

There are at least some options for unemployed people who need credit.

Gold Loan: If you are unemployed and are in urgent need of a loan, then securing a loan against gold would be a good choice. The documentation required is very limited and there would be no requirement for income proof with some lenders.

Following are reasons why securing a gold loan is advantageous for unemployed:

•    It is swift and quick. You can literally walk-in to your nearest lender's branch with your gold ornaments or coins and get over the counter loan disbursement.  

•    It is simple. Most gold loans don't require any documentation process. In case any documents are required, it is simple and standard like ID proof, address proof etc.

•    Attractive interest rates. Special rates are offered for existing customers.

•    It is safe and secure. Your gold is valued and sealed in your presence to ensure your gold is secure in the lender's safety vault.

•    Gold loans have lower interest rates than a personal loan or credit card loan, so your monthly outflow is lower as compared to various other forms of credit.

•  Benefits for existing customers: If you are an existing customer, then you get access to easier repayment options. Additionally, there won't be any requirement for documentation, making the whole loan process quicker and easier.

•    Flexible Pricing and tenures depending on the budget of the customer.

•    Instant liquidity: You can liquidate your loan against gold anytime.

Personal loan: If you do not have any gold to pledge, then you might try approaching lenders for an unsecured loan. If you have a good credit history, then lenders might be willing to lend to you. If you are able to convince the lender that you will soon secure employment and will be able to service the loan EMIs at the earliest, then you might stand a chance to avail an unsecured loan. Having a long-standing relationship with the bank would be helpful at such times.

If your loan application is approved, keep in mind that it will come at a disadvantage to you, like a higher interest rate.

Following are the disadvantages of personal loan:

•    Unattractive interest rates.

•    Terms and conditions are set by the bank – you won't be in a position to negotiate

•    Smaller loan amounts

•    Only few lenders offer loans for unemployed, depending on several terms and conditions.

•    You will likely be asked to provide a guarantor

Keep in mind some of these factors when you apply for a gold or personal loan. And always remember, the better your credit history, the easier the process will be and better the loan terms.