The process of a loan sanction is not as easy as it sounds. A lot of factors are considered while granting a loan to an individual.Even an individual with a good job has to go through a tedious process and various verifications to avail a loan. Where does that leave an unemployed individual who needs a loan to make ends meet? Many of these unemployed individuals might have been just out of work, in between jobs or quit their jobs to start their own ventures. Most of the banks and financial institutions dont grant loans to unemployed individuals. But there are several banks which have provide cash loans for unemployed crowd. The loan amount granted under theses schemes can be used by the individual to even start their own venture.
Types of Cash Loans for the Unemployed
Listed below are the types of cash loans available for the unemployed
- Same day loans for the unemployed-It can be hard for an unemployed person to get loans easily and getting loans the same day seems almost impossible. But ˜Same Day Loans for the unemployed makes it possible for an unemployed person to avail loans within a day. These loans are usually short term loans and require the applicant to be over 18 years of age with a valid bank account irrespective of whether they are employed or have a bad credit.
- Unsecured loans for the unemployed- One can avail unsecured loans if they are unemployed without any risk of losing a pledged asset. Unsecured loans come with a higher interest rate with varied repayment tenure periods.An unemployment unsecured loan application can be made stronger by getting onboard a cosigner who is in a better position financially.
- No credit check loans for unemployed- No credit check loans is the best option for those who are unemployed and have a bad credit history.This kind of loan requires no collateral.
- Payday loans for unemployed-Payday loans for unemployed are granted without any credit checks.Interest rates for payday loans tend to be higher than the normal loans.
- Long term loans for unemployed-The best part about long term loans for unemployed is that the anyone can apply for the loan irrespective of their credit history or employment status.In this kind of loan, the borrower can pledge an asset and take the loan.
Benefits of Cash Loans for Unemployed
Listed below are the benefits of Cash loans for unemployed.
- Unemployed individuals can avail loans.
- Most of the loan plans require no collateral.
- Same day loans for unemployed plan for emergency cash.
- Individuals with bad credit history can avail the loan.
- Flexible tenure periods.
- Availability of short term and long term loans
Disadvantages of Cash Loans for Unemployed
The disadvantages of Cash loans for unemployed is listed below.
- Higher interest rates.
- Terms are set by the bank.
- Smaller loan amounts.
- Fewer banks offer loans for unemployed.There is not much to choose from.
- Most of the banks/financial institutions require collateral.
- Requirement of a cosigner for some of the plans offered for unemployed individuals.
Cash loans for unemployed in India
The loan plans for the unemployed in India is different from the loan plans in other countries. There are no payday cash loan plans, same day cash loan plans for the unemployed in India. Some of the banks in India offer unsecured loan. The government has several loan plans drafted for the unemployed crowd in India.
Government Loan Plans for Unemployed in India
- Prime Ministers Rozgar Yojana-This scheme has been designed especially for the unemployed.The main of the scheme is to provide employment to the unemployed by providing them financial resources to start their own ventures. The loan is available to any youth who is educated up to standard grade 8 in India. The loan is of composite nature and a loan of Rs.2 lakh and a loan of Rs.5 lakh is advanced for business sector and industry sector respectively.
- All unemployed individuals between the ages of 18 and 35 are eligible for the loan.
- The income of the beneficiary with the spouse or their parents should not exceed Rs.1 lakh p.a.
- Loan subsidy for unemployed youth-Tamil Nadu government has a scheme for the unemployed called NEEDS(New Entrepreneur and Enterprise Development scheme).Under this scheme the state government provides 25% subsidy for loans for unemployed youth who are graduates.Collateral for the loan through banks is decided by the bank. The project estimate is between Rs.5 lakh and Rs.1 crore and the infrastructure cost of the project cant exceed 25% of the loan.
- Cash loans for the unemployed by the Government of West Bengal-The government of West Bengal has a loan scheme for the unemployed wherein a loan of Rs.50,000 will be granted.The main aim of the plan is to help unemployed youth to start their own business/ventures.Youths between the age of 18 and 45 are eligible for this plan.
- Agriculture loan for the unemployed-The government has collaborated with many banks to provide financial resources for unemployed agriculture graduates. This loan can be utilised for any kind of agricultural projects. Any unemployed agricultural graduate above the age of 22 years old is eligible for this loan.
Secured unemployment loans- Secured unemployment loans are sanctioned against a collateral or security. In this loan scheme, the borrower pledges an asset to the lender based on which the lender sanctions the loan. The loan amount depends on the value of the asset pledged.
Benefits of secured unemployment loan:
Listed below are the benefits of secured unemployment loans.
Disadvantages of secured unemployment loan:
- Lower interest rates
- Flexible loan repayment terms
- Long term tenure
- Smaller individual loan payments
- Tax deductible interest
Listed below are the disadvantages of secured unemployment loans.
- Risk of possession of asset by the lender if the loan is not repaid in time.
- The borrower should be the owner of the property that is being pledged.
- Loan term is set by the lender.
- More expensive in the longer run
Unsecured unemployment loans-Unsecured loans is another way through which unemployed individuals in India can avail loans.Unlike secured loans, there is no need for collateral in unsecured loans and it comes with a higher rate of interest.A good credit history will increase the chances of availing Unsecured Loans in India.
Benefits of unsecured unemployment loans-
Listed below are the benefits of unsecured unemployment loans.
Disadvantages of unsecured unemployment loans-
- No need for collateral.
- No need for cosigner.
- Unemployed individuals can get a loan under this scheme.
- Quicker loan approvals.
- Less documentation.
Listed below are the disadvantages of unsecured unemployment loans.
- Higher rate of interest
- Higher individual loan payments.
- Terms are decided by the lender.
- Short term loans.