When dealing with unemployment, a personal loan may seem to be a viable option to get rid of your financial difficulties. However, as there’s unemployment, you will have to prove your repayment capabilities. How will you be able to prove your repayment worthiness? What are the methods that an unemployment individual can adopt to get a personal loan sanctioned? These queries and a lot others will be answered in today’s article.
Methods to Get a Personal Loan for Unemployed:
1) Ask Friends/Family Members
Before you approach the bank and financial institutions, don’t forget to check up with your friends/family members. Asking someone close to you for any kind of financial help is one of the most straight and simple approaches that you can adopt. However, ensure that the amount that you are going to need isn’t going to be hard for your dear to manage. Also, make sure whether or not, you will be able to repay the amount in the decided time span. If you don’t meet the expectations set in, then it may affect the personal relationship.
2) Contact Your Existing Bank
If you had been employed earlier, then seeking the bank where you had your salary account would be a great move. Your previous records would help the bank determine the earning capacity. It also depends upon your credit score, so if along with a good credit score, you have plans of getting employment at the earliest, then that’ll make it easier to get your loan application processed. If your commercial bank doesn’t approve of your request, then you may try reaching out to a co-operative bank too.
3) Go for an Secured Loan
If you have gold, property or any kind of fund under your name, then that can act as collateral against your personal loan. Here, because the loan is secured in nature, the bank could end up providing the personal loan at lower interest rates. Anyways, don’t forget that, if you fail to repay the loan amount, then your collateral would be under the ownership of the respective bank or financial institution.
4) Go for a Loan against Life Insurance Policy
If you don’t have or don’t want to apply for a secured Personal loan, then you may feel free to pledge your life insurance policy. The lender is going to transfer policy under their name until the full loan amount hasn’t been repaid. The interest rates will definitely be lower in comparison to an unsecured loan, but to be precise, how much lower it can get, well that will depend upon the premiums.
5) Opt For a Peer To Peer Lending Company
Times have changed, and today, if you want you can opt for additional funds by reaching out to Peer To Peer Lending Company. They can allot you a loan at lower interest rates, and have easier eligibility criteria. What better offer can you get than this?
Risks Involved in Opting For a Personal Loan (Unemployed):
Personal loan for unemployed comes with its own share of risks that you must keep in mind before opting for the personal loan:
- Missed Deadlines:
The missing of the payment deadlines is something that’s a little common issue for the unemployed individuals opting for a personal loan. The deadlines not being met on time will lead to credit score damage, and make the already present financial condition even more harder.
- Shorter Repayment Period:
If the lender assumes you to be a risky borrower, then you may be presented with shorter repayment terms. The lender has a belief that your financial situations may change anytime, and that’s there’s allotment of shorter repayment terms.
Personal loan is a great idea when you have a regular stream of income. However, when it comes to unemployed individuals, personal loan is a bit hard to obtain, and it comes with its own share of risks. Personal loans may not be for everyone, and in such cases, you may even look for some alternatives. That being said, at the end of the day, gets yourself aware about all the details before you finalize upon anything.