Struggling with no job? Here’s how to get an instant personal loan | Mint

Personal loans are a great option if you want quick access to funds in order to cover your expenses for a while. These types of loans have become popular because of the fact that you do not have to provide collateral to apply for the loan.

However, you need to have a high credit score along with a stable source of income to be eligible for a personal loan. If you are unemployed and are in need of credit, you can resort to instant personal loans offered by NBFCs and banks. Let us discuss in detail on how you can avail an instant personal loan if you are an unemployed:

Instant personal loans for unemployed

Instant personal loans for unemployed individuals is a kind of personal loan that provides credit to individuals who do not have a regular source of income. Such loans are issued by banks, NBFCs or even online lenders. These types of loans have the quickest loan disbursal and have a quick approval process. However, instant personal loans offered to unemployed individuals may attract higher interest rates and low principal amounts because of the risk involved for the lenders.

Tips to become eligible for instant personal loan for unemployed

Although the exact criteria may differ according to the lender’s requirements, here’s how you can make your profile stronger and improve your chances of getting an instant personal loan even if you are unemployed:

Alternative income sources: If you have a property which you have given on rent or have long term investments under your name, then you can show these as a proof of stable income to the lender.

Guarantor: You can apply for an instant personal loan along with a guarantor with a strong monthly income and improve your chances of getting your application approved.

Collateral: If you have a high value asset like a house, gold or luxury car, then you can apply for an instant personal loan using a collateral. This will act as a guarantee that you are capable of repaying the loan amount in time and if you fail, the lender can take possession of your asset.

Credit score: If you have a high credit score, there are still good chances that you might get an approval for the loan. This is because of the fact that your credit score reflects your credit history and a high credit score suggests that you have been a good borrower with an excellent repayment record which makes you less risky for the lender.

How to secure an instant personal loan when unemployed

Choose the right lender: Always compare loans offered by banks, NBFCs and online lenders and evaluate which deal is the best deal for you.

Check Loan Features: Check interest rates, repayment period and terms of other costs. These loans for the unemployed individuals are provided at higher rates of interest because of the increased risk.

Prepare Documentation: Keep all the necessary documents ready at all times. Although the documents required might differ according to the lender’s requirements, you must always have your basic documents ready.

Risks involved in taking an instant personal loan while being unemployed

High interest rates: These types of loans charge a higher interest rate as compared to other loans in the market. This is because of the risk involved due to lack of regular salary.

Smaller loan amounts: Because of the high risk for the lender to recover the money in time, these personal loans are offered with relatively lower amounts as compared to normal personal loans.

Shorter tenure: Such loans usually have even shorter durations of repayment and therefore the monthly expenses are even larger.

Alternatives to instant personal loans

It is always better to explore and then select one option. Hence, along with instant personal loans you can also search for other forms of credit which might not charge high interest rates and suit your budget better.

Government schemes: In order to provide aid to the unemployed individuals, the government provides several schemes which offer loans and grants which have a much lower interest rate than any other loan provided by banks. Such loans are usually easier to obtain and do not have a strict eligibility criteria.

Buy now pay later: Platforms like Lazypay and Simpl offer instant personal loans up to 5 lakh which have a simpler eligibility criteria and are easier to obtain as compared to the mainstream loans provided by banks.

Loans against investments: Many lenders offer funds against securities such as mutual funds, gold, or shares. This becomes more like a secured loan and as a result you can get lower interest rates because of the collateral.

In conclusion, getting an instant personal loan might be tough if you are unemployed. However, if you act smartly and fulfil the eligibility requirements of the lenders, you might be able to get an instant personal loan. You must also evaluate your financial situation carefully before you apply for the loan and apply only if you are completely sure that you can afford it. This way you can avoid any extra burden on your finances.

(Note: Raising a personal loan has its own risks)