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1. Determine your loan needs: Before applying, it's important to assess how much money you really need.
2. Review your credit report: It becomes difficult to win the trust of a bank when you are unemployed, so it becomes important to have a high credit score. A good credit score helps you in getting a loan.
3. Gather necessary documents: Prepare all the necessary documents for your loan application. Also include documentation that can demonstrate your ability to repay the loan.
4. State your objective clearly: When applying, be clear about why you need the loan. Provide detailed information about how you plan to use the money, which will help the lender trust your application.
What loans will banks give?
Getting a loan while unemployed is difficult but not impossible. If your credit is good then banks give you loan. In case of no job, your relationship with the bank or financial institution plays an important role. If you maintain a high credit score, it increases your chances of getting approved.
You can also consider these options
Secured Loan: You can take a loan from a bank using an asset like a car or property even after leaving your job. Banks will easily give you a personal loan using your property as collateral. One advantage of this type of loan is that the bank will charge you less interest.
Co-Signer Loan: You can easily get a loan by making a credit worthy person with a stable income a co-signer on the loan. In case of non-payment of loan EMI, the co-signer takes the responsibility of payment.
Why do banks shy away from giving loans?
Banks often impose strict eligibility criteria for unemployed applicants, including higher credit score limits and lower loan amounts. Due to the increased risk of not having a job, personal loans to unemployed individuals are generally offered at higher interest rates than employed individuals. In case of job loss and financial crisis, talk to your current bank to explore options such as payment arrangements or lower interest rates.