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  • There’s a myth that unemployed individuals are not eligible for personal loans. However, that’s not completely true. There are lenders who offer personal loans even if you don’t have a stable job. Of course, the interest rate, loan tenure, and other factors are different from loans offered to income earners, but that won’t stop you get financing from various lenders.

    You can get such loans in the form of secured loans, payday loans, and Government personal loan schemes for the unemployed, to name a few.

    Compare best personal loans for the unemployed

    Banks/Lenders Interest Rate (p.a.) Loan amount Tenure
    LazyPay 15% to 28% Up to Rs.1 lakh 3 months to 24 months
    SmartCoin 30% to 36% (APR) Rs.1,000 to Rs.25,000 3 months to 4 months
    State Bank of India Pension Loan 11.95% to 12.45% Rs.2.5 lakh to Rs.14 lakh Up to 84 months
    Punjab National Bank Personal Loan to Pensioners 11.25% Rs.25,000 to Rs.3 lakh Up to 60 months
    Bank of India Star Pensioner Loan Scheme 11.15% Up to Rs.5 lakh Based on lender’s terms and conditions
    Prime Minister’s Rozgar Yojana Based on the scheme specifications Up to Rs.10 lakh 3 years to 7 years


    LazyPay operates as a part of PayU offering instant personal financing facilities to customers. You can get a loan of up to Rs.1 lakh with LazyPay. In order to get a loan, you need to download the LazyPay app and apply.

    Benefits/Key highlights

    • Instant approval
    • Minimal documentation
    • Flexible repayment options


    SmartCoin is an app-based money lending platform targetted towards the middle- and lower-income strata. The interest rates offered by the lender are on the higher side because of the short loan tenure.

    Benefits/Key highlights

    • Paperless application process
    • Quick loan disbursal
    • Minimal documentation
    • Repeat loan facility available

    State Bank of India

    State Bank of India offers SBI Pension Loan to Central or State Government or Defence pensioners who draw their pension from any of the SBI branches.

    Benefits/Key highlights

    • High quantum of financing
    • Flexible repayment tenures
    • Competitive interest rates

    Punjab National Bank

    Punjab National Bank offers personal loans to pensioners who draw their pension through any of PNB’s branches. This loan can be taken to meet the medical expenses of pensioners during the time when they need it most. Borrowers can avail a loan multiple times based on the adjustment of the previous loan.

    Benefits/Key highlights

    • High quantum of financing
    • Attractive interest rates
    • Flexible tenures

    Other than the aforementioned loan schemes, you can also apply for the following schemes:

    Bank of India

    Bank of India offers BOI Star Pensioner Loan Scheme to a retired employee who draws a regular pension through the bank branch. The net pension of the applicant after the loan EMI is deducted should be at least 40% of the total pension amount.

    Benefits/Key highlights

    • High quantum of finance
    • One of the lowest interest rates on personal loans in India
    • Minimal documentation for processing

    Prime Minister's Rozgar Yojana (PMRY)

    This scheme aims to provide self-employment opportunities to the educated unemployed youth of the country. The scheme has undergone quite a few modifications over the years, including the relaxation of norms in the north-east region.

    Benefits/Key highlights

    • Loan for the unemployed between the age of 18 and 35 years
    • No collateral required for loans up to Rs.1 lakh
    • Preference will be given to women and weaker sections of the society, including SC, ST, or OBC applicants

    Penalties and Internal Charges

    LazyPay Personal Loan

    Processing fee 2% of the loan amount
    Prepayment charges Not applicable, as prepayment is not supported
    Late fee Rs.10 per day

    State Bank of India Pension Loan

    Processing fee 0% to 5% of the loan amount plus GST
    Prepayment charges 3% of the prepaid loan amount

    Punjab National Bank Personal Loan to Pensioners

    Processing fee Nil
    Prepayment charges Nil
    Documentation charges Up to Rs.450 plus GST

    Bank of India Star Pensioner Loan Scheme

    Processing fee Up to 2% of the loan amount
    Prepayment charges Nil

    Eligibility : You need to be a minimum of 18 years of age to apply for such loans.

    Documents required

    The documents you need to provide may include:

    • Residential proof
    • Age proof
    • ID card
    • PAN card
    • Aadhaar

    Things to consider

    Before applying for a personal loan, here are a few things you need to keep in mind:

    • The advertised interest rate may differ from the final rate offered and is at the sole discretion of the bank.
    • Defaulting on such loans may result in high penal charges.
    • Calculate the EMI through an online EMI calculator to know the monthly instalment amount.
    • Ensure that you have enough funds to make timely repayments.

    How to apply?

    You can choose any of the below options to apply:

    • Through the lender’s website or mobile application
    • Directly through the bank’s branch

    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.
    • 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.

    • Lower interest rates
    • Flexible loan repayment terms
    • Long term tenure
    • Smaller individual loan payments
    • Tax deductible interest

    Disadvantages of secured unemployment loan:

    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.

    • No need for collateral.
    • No need for cosigner.
    • Unemployed individuals can get a loan under this scheme.
    • Quicker loan approvals.
    • Less documentation.

    Disadvantages of unsecured unemployment loans

    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.

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