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Loan for unemployed is a funding support offered to educated youth to fulfil their wish of running their own enterprise. Financial institutions including banks and NBFCs helps them by offering loans or cash credit for professionals who are currently not working for a company or enterprise. This ensures that even non-professionals or professionals can set-up their own startups.
Table of Contents :
The interest rate charged by top banks and NBFCs on business loans for unemployed people is as follows:
Comparison of Business Loan Interest Rates offered by leading Banks/NBFCs
| Bank/NBFCs | Interest Rate | |
| Axis Bank | 10.75% p.a. onwards | Apply Now |
| Flexiloans | 1% per month onwards | Apply Now |
| HDB Financial Services Ltd. | 8% - 26% p.a. | Apply Now |
| HDFC Bank | 10.75% - 25% p.a. | Apply Now |
| IDFC First Bank | 10.50% p.a. onwards | Apply Now |
| Indifi | 1.50% per month onwards | Apply Now |
| Kotak Mahindra Bank | 16% - 26% p.a. | Apply Now |
| Lendingkart | 12% - 27% p.a. | Apply Now |
| Mcapital | 2% per month onwards | Apply Now |
| NeoGrowth Finance | 15% - 40% p.a. | Apply Now |
| Tata Capital | 12% p.a. onwards | Apply Now |
| UGRO Capital | 9% - 36% p.a. | Apply Now |
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank, NBFC and RBI. GST and service tax shall be levied extra on the mentioned charges.
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Documents Required for Loan application for Unemployed
The documents that are required to be submitted at the time of application of unsecured business loan for the unemployed are:
| Identity Proof | Passport, PAN Card, Aadhaar Card, Voter’s ID Card, Driving Licence, Photo Credit Card, Central and State Govt. issued Photo ID Proof, Defence ID Card, etc. |
| Residence/Business Proof | Aadhaar Card, Ration Card, Passport, Bank Account Statement, Voter’s ID Card, Letter from any recognized public authority, Telephone Bill, Electricity Bill, Water Bill (not more than 3 months old), etc. |
Additionally the following documents also need to be submitted is well formed and documented business plan to implement.
Business Loan for the Non-working Professionals – Features and benefits
Features:
- Interest Rate: Varies from applicant to applicant
- Loan amount: Minimum has no limit and maximum is up to Rs. 10 lakh (Under Mudra Yojana)
- Repayment Tenure: Up to 5 years
- Collateral: Not required
- Processing Fee: Nil
Benefits:
- Quick disbursal
- Attractive interest rates
- Convenient application process
- Less paperwork
- Hassle-free documentation
Applicants those who are searching job may still get a business loan with attractive interest rates. This can be achieved when the prospective client has a good business plan in hand. They should, however, have a strong credit score with good repayment history, preferably with no defaults on loan or credit card payments. Also, applicants can better their chances of securing a loan by having a co-signer on the loan. The co-signer of the loan must be employed or run a profitable business and have a good credit score. Do note that the bank or NBFC through which loan is applied for will greatly affect the applicable rate of interest.
Know All About: Mudra Loan Details for New Business
Business Loan for Non-working people – Eligibility
The eligibility criteria for business loan for people searching employment depend on the lender or the loan scheme applied for. Even so there are certain criteria that are common across Banks and NBFCs such as:
- Candidate must hold Indian Citizenship
- Age Limit – Min. 18 years or above
- Good business plan
- No defaults on loan payments
- Good CIBIL score
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How to apply for Unemployed Loans?
The process to apply for an Unemployed Loan through Paisabazaar is easy and simple, follow the below mentioned steps:
Step 1: Visit Paisabazaar.com to check and compare loan options
Step 2: Pick the required scheme by filling and submit the loan application form
Step 3: Submit the documents along with the loan form for bank to verify them
Step 4: After verification, the bank shall approve the loan
Step 5: After the loan is approved, the bank shall disburse the loan amount in the applicant’s bank account
Types of loans you can apply for if you are Unemployed
The loans that can be really helpful at the time of dire need are as follows:
- Mudra Loan under PMMY
- Loans under PMEGP
- Loans from Small Finance Banks and Micro Finance Companies
Tenure
The repayment tenure on small business loan for unemployed people is flexible and depends on the lender. Applicants can get loan tenure up to 5 years. The final applicable loan tenure is dependent on the amount of loan secured and business profile.
Increasing the Possibility of Securing Business Loan
Securing a business loan for unemployed people is quite challenging. In addition to the normal challenges applicants must also have to deal with all the challenges associated with being unemployed. For this purpose there are a few things that applicants can do to improve their chances of securing a business loan:
- Good CIBIL Score A CIBIL score over 750 greatly helps in securing a business loan
- Collateral/Security Secured business loans are comparatively easier to avail than unsecured ones
- Co-applicant Applicants who apply for a loan with a co-borrower have a better chance in securing a business loan
- Government Guarantee Another way to secure a business loan is to apply for loans where government or third party provides security
- Income Applicants can also apply for a job, as having a secure income helps in securing a business loan
FAQs
Q. Can I get an instant cash loan with no job?
Ans. Yes, you can get instant cash with no job. The options include cash against your fixed deposits, loan against credit cards, overdraft against bank account and loan against good CIBIL score.
Q. What do banks require for a small business loan?
Ans. Banks require general documents from the applicants that include Identity, Age, Address and Income Proofs. Details regarding company registration and other financial documents.
Q. How important is my Credit/CIBIL Score if I am looking to avail a loan for the unemployed?
Ans. Credit score or CIBIL score plays a vital role in the chances of your loan approval. Any CIBIL score above 750 is considered good by financial institutions.
Q. Is there any Government Scheme for providing a loan to Unemployed Youth for starting a small business?
Ans. There are few govt. funded loan schemes that can be availed by unemployed youth are stated below:
- Mudra Yojana under Pradhan Mantri Mudra Yojana (PMMY)
- Pradhan Mantri Employment Generation Program (PMEGP)
- PSB Loans in 59 minutes
- The Credit Linked Capital Subsidy Scheme (CLCSS)
- Pradhan Mantri Rozgar Yojana (PMRY)
- Startup India
- Standup India
Q. How do I get a loan to start a business when I am unemployed and still in college?
Ans. The chances are really dim of loan approval if you are a student or unemployed and in college. The unemployed youth should at least have working experience of 2 years to apply for small business loans.