Who is unemployed, does not get a credit – so the generally valid view. Because how should a loan be repaid without a fixed, regular income. Sounds logical! And yet: Whoever is unemployed is not generally excluded from the credit market. What are the possibilities of a credit for the unemployed?
The fact that you don’t have a permanent job doesn’t mean that the search for financing is completely hopeless. This is the good news on the subject of loans for the unemployed. However, we would like to warn you that there are some credit models under this generic term that you should rather do without. With overpriced products, dubious providers try to take the last – basically non-existent – money out of the pockets of people with problems. It is doubly hard on consumers who are not only unemployed. They are also burdened by negative entries in the Schufa register? In this case it is almost impossible to get a loan on the normal UK credit market. Therefore you should always use objective credit calculators and comparisons if you are looking for fair and therefore affordable financing despite your problematic situation.
Can I borrow money from the state?
If you receive money from the state month after month, you are in a special situation. As is well known, the employment agency will only provide you with the most basic necessities. In individual cases, recipients of state authorities can also obtain a small loan through these contact points. For example, if you have to move house (possibly in connection with a new job) or buy new furniture. Such injections of funds are not a gift, so you will have to plan for repayment, although you will at least be spared interest costs. Repayment, however, will still be a burden, as the money you are entitled to from the state will not only have to cover your normal running costs.
Moreover, not all applicants will be successful if you ask the office for a loan for the unemployed. Experience has shown that applications for an advance on benefits are carefully examined.
Personal loan: personal loan as the cheapest option?
People who can borrow money within the family can consider themselves lucky. Even good acquaintances may be able to help you out of a precarious situation when the prospects for loans to the unemployed from normal banks are generally poor or high interest rates are expected. However, you should consider this step very carefully. An unemployment loan from relatives or friends can be a burden for both sides.
If you suddenly find yourself unable to meet the agreed repayment terms, sooner or later financing will become a personal problem. If someone gives you money as an alternative to a loan for the unemployed, you will be in debt to the giver. Not everyone can cope with such circumstances. One reason why some “needy” people prefer to go to the bank or apply for a proper loan via the Internet. Quite understandable, although more expensive than an interest-free loan from the family environment.
Unemployment credit: What conditions should I observe?
So you have made the decision for a “professional” credit for the unemployed? The first important step has now been taken. Now it is a question of how to plan the application correctly. The truth is that unemployed borrowers in particular should be very accurate and considerate in their search for a suitable offer. After all, your situation may change in the near future. Ideally for the better, so that you can redeem the unemployment loan early or accelerate the payment of instalments. Three criteria are particularly important for a work credit due to the limited funds available. These aspects are
- Particularly long running times
- Possibilities for adjusting the payment by instalments
- low monthly credit rates
Several points can generally be summarized under the term “customization options”. The options can help to take account of changed living conditions when making repayments.
Subsequent changes to credits for the unemployed
The opportunity for temporary deferment in particularly difficult phases can be mentioned here. Free unscheduled repayments or free full repayments turn out to be advantageous if you find a job at short notice that gives you enough financial leeway to reduce or completely eliminate the credit burden in part. If it is a manageable small loan, repayment in one go is quite conceivable. Unscheduled repayments are also sensible in order to influence the cost of the loan. You can keep the monthly installments low by having more choice in terms of terms. Depending on the bank and credit model, you can gradually manage the repayment with low double-digit GBP sums per month.
Are you earning money again? Then maybe you can also increase the loan rates to be credit free faster. With all interim measures, bank customers should remember that there can be unforeseeable burdens, even with credit for the unemployed. Repairs, medical expenses and similar things have to be paid despite the loan repayment.
P2P loans – credit from investors for starting a business?
Over the years, various platforms have emerged on the Internet that also grant or arrange loans for the unemployed. Of course, creditworthiness also plays a role in this area. However, if you are looking for a loan to set up your own business or some other form of self-employment, you can increase your chances of getting a loan by presenting your project in a promising manner, depending on the orientation of the portals.
The platforms themselves, which work according to the “P2P” system, act as intermediaries for loans “from private to private”. Private lenders provide financing together with other investors – this often includes loans for unemployed people who dare to take the plunge into self-employment. Those who present themselves well, explain their future ventures professionally and are also prepared to pay a good interest rate have good cards when applying for a loan. Such platforms are not dubious, and well-known banks usually appear as partners.
So we see:
There are various types of credit offers for the unemployed. Exact planning is only even more important here than for loans for working people who have sufficient income for a permanently secure repayment. For the unemployed, even small additional financial burdens can mean massive repayment problems. And these can lead to the failure of the repayment together with additional problems with the creditworthiness. So prepare yourself comprehensively for a loan for the unemployed if there are no other solutions for your money worries!