Personal loans are unsecured loans. This means that you do not need to provide collateral as security for the loan amount. So, it is usually difficult to get a personal loan if you are unemployed. But, it’s not impossible.
Here are a few tips that can help you get a personal loan if unemployed:
1. Having a good credit score – If you have a good credit score which is above 750, then this might prove as a plus point to the lender as you will be considered a credit worthy customer. This will lower the risk factor and can help you get a personal loan without employment.
2. Having a good credit history – If you have a good credit history (all the repayments done on time) it can be very advantageous. Keeping a clean credit record can help assure your lender that you possess a low risk at defaulting on your repayments and this can lower the risk factor involved.
3. Possible employment in future – If you are able to show evidence of employment in the near future, then this can also serve as a plus point for your loan approval. Providing offer letters from reputed companies or such proof can help you get your personal loan approved as the bank will know that you will be capable of repaying the loan with your steady income that will follow with employment.
4. Relationship with bank - If you are an existing customer with the bank you are borrowing from and have maintained a healthy relationship with them, then there are higher chances of getting personal loan from them. Long standing relationships come in handy at these times.
5. Providing a guarantor – If you apply for a loan with a guarantor who has a good and stable job with a good credit score, this can help with getting a personal loan. A guarantor is a person who will need to pay for your loan if you cannot afford to repay it.
Before applying for a personal loan, you must know that there is a chance of rejection due to unemployment. A loan rejection can negatively impact your credit score. Also, high interest rates are possible if the individual is unemployed and these can be hard to repay.
To apply for a personal loan, click here.
Additional Reading: Loans for unemployed