Can Unemployed People get Loans?

We all struggle with our finances from time to time. Even when you’re very good at saving and using money, you might find that issues suddenly arise that make it difficult for you to afford all the bills that you need to pay. If you are out of work for a short period of time, or suffering from unemployment, then you might find that you’re unable to pay the bills that you need to survive. In this case, you may consider taking out a loan to help you make ends meet. Unfortunately, a lot of lenders will be unwilling to give a loan to someone who doesn’t have a stable salary to prove that they will be able to make repayments.

Fortunately, there are still some options available out there for people in periods of unemployment. If you don’t have a job and you desperately need money, there are solutions that could help you to access the finance that you need.

Looking for Specialist Loans

In most cases, you will need to have a steady salary if you want to borrow money from mainstream lenders. However, there are a wide number of specialist providers out there that are now willing to give loans to the unemployed. If you’re without a job, this doesn’t necessarily mean that you can’t access cash in the right circumstances. However, in some cases there may be a range of factors in play that make it more difficult to access credit.

If you also suffer with a bad credit history, alongside unemployment, or you have every had a bankruptcy or county court judgement against your name, then this will make your attempt of applying for a loan far more difficult. However, being in a terrible situation financially doesn’t mean that all lenders will reject you. What it does mean however is that the loans you can get will often come with higher interest rates, and you will not have as many options available to you.

One of the best ways you can improve your chances of getting a loan while you are unemployed is to look for ways to boost your credit history. For instance, you may be able to do this by ensuring that your name is on the electoral role. Additionally, you should make sure that you space out any applications that you make for credit. Remember that every time you apply for a loan with a company you will make some mark on your file. If you are rejected from a loan, this means that the next lender will be able to see this rejection, and it could mean that they are less likely to accept you.

What Types of Loans Can You Get?

If you’re unemployed, then the chances are that you won’t be able to apply for the best loans available on the market, or those with small interest rates and great terms. Unfortuantely, these loans are often reserved for people who have pristine credit records and long-term employment that helps to limit their risk for the lenders.

However, there are some specialist lenders on the market that will give loans to people who appear to be a higher risk because of unemployment and poor credit histories. You will be able to compare the different options available in these loans the same way that you would with any other kind of loan and mortgage.

One very important thing to remember is that the greater of a risk your lender perceives you to be, the more interest you will need to pay to get your hands on a loan.
Unfortunately, it’s the people who need money the most that often face the most scrutiny from lenders. While you might need to pay hefty charges in interest, if you know for certain that you can make repayments on time, a loan should help you to prove that you are trustworthy as a borrower, and should therefore make sure that your credit history improves over time. Just make sure that you never take on a loan that you cannot afford to pay back, as this can lead to a spiral of debt that is very difficult to get out of.

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