How do I get a personal loan in India if I am unemployed?

Posted by sourav on October 27th, 2018

Applying for a personal loan and getting it approved is a very tough task. It is tougher if
the applicant does not have a steady income and it is toughest for a person who is
unemployed. Banks and NBFCs have eased the process for approving the personal loans
but it is still a very tough task for people who do not have a source of income.
The credit score of an applicant is taken into account while approving the personal loan,
which, in most cases, is not applicable for unemployed. The applicant’s repayment
capacity is also highly dubious ass he has no source of income. However, unemployed
applicants can also get personal loans in certain cases. In this article, we will discuss
how an unemployed person can get best personal loan in India.

Unsecured Loan with a Co-Signer

An unemployed applicant, who does not have a source of income, can apply for the
personal loan with a co-signer (or a guarantor) having a good credit score. The co-
signer, here, acts as a security for the bank and if the unemployed applicant fails to
make the repayment, the bank will approach the co-signer to recover its fund.

Secured Loan

The unemployed applicant can get the loan from the bank by keeping some asset as
collateral. These loans are available at relatively lower rates of interest as there is less
risk for the bank. The applicant can provide an asset in lieu of the loan amount. Most
banks sanction the loan amount of up to 75% of the asset value in these cases.

Pradhan Mantri Rozgar Yojana

Pradhan Mantri Rozgar Yojana is framed keeping unemployed people in mind who are
willing to start a business of their own. The government provides the financial resource
to the applicant under this scheme to start a business of his own. Any youth who has
completed the education till class 8 th and is between 18 and 35 years of age can apply
for this loan. For starting a business venture, the applicant gets up to ₹ 2 Lakhs whereas
the loan provided for starting an industry of his own, the applicant gets a loan of up to ₹
5 Lakhs. However, the income of the applicant with his spouse or parents should not
exceed ₹ 1 Lakh per annum if he wants to take this loan.

Pradhan Mantri Mudra Yojana for Women

Unemployed women, who want to start an industry of their own, can get loans under
Pradhan Mantri Mudra Yojana for Women. The primary aim of the government behind
this scheme is to improve the condition of women by encouraging them financially to

start a new venture of their own. Various banks and NBFCs offer loans to eligible
applicants under this scheme.

Peer-to-Peer Lending

Peer-to-peer lending is a type of crowd-funding where the lender provides loans to an
applicant at a definite interest rate. Both parties are generally brought together through
an online portal where adequate steps are taken to ensure healthy lending takes place.
Unemployed applicants who do not get loans anywhere else can try peer-to-peer
lending to get a personal loan. Even though there are not many companies that offer
peer-to-peer lending, but the recent developments in the financial market have seen
unemployed youths getting loans through it as well.