If you find yourself without a job and on the unemployment lines, it can result in a cash shortfall, so you may want to take out a loan to take the pressure off making ends meet. The problem is that most lenders will deny you a loan because they want their customers to have a stable job and regular earnings. If this has happened to you, there’s some good news, because there are some options available if you are unemployed and in need of a loan.
Loans for unemployed
Mainstream lenders require you to have a steady income in order to borrow from them, but the number of specialty lenders that will provide loans to unemployed is increasing. That means that if you do not have the stability of a job or a salary that would allow you to borrow money from traditional banks, you now may have an easier time borrowing cash.
However, there can be specific factors at that make it trickier to get the kind of credit you desire. For example, if you have a poor credit history, which can occur because you’ve had late payments, missed payments in the past, filed bankruptcy, or had a County Court judgment, your credit score can be affected, and that, in turn, can make it harder to borrow money.
If you are unemployed and currently without a regular paycheck, you might not be able to borrow from traditional lending institutes, but you may still be able to get cash. Being in this situation does not mean all lenders will deny your application. It just means you have fewer options, and that a loan for you may result in a higher interest rate.
Improve your credit history
If you are unemployed and looking for a loan, you want to make yourself as appealing as possible to the potential lenders, and one thing you can do is work on improving your credit score. When your local authority sends you details on how to add you name to the electoral role, you should do this. Space out your credit applications, because each loan application leaves a footprint on your file, so if your application is rejected, the next lender is likely to also reject you, and each time your credit report is accessed, it negatively affects your score, so try to minimize you applications. When you are able to get credit, it is important that full payments are made on time, which over time will gradually begin to rebuild your damaged credit.
You won’t be able to apply for best buy loans, which are the ones that offer the best rates and terms. These are usually reserved for borrowers that are employed, have a solid income, and have a clean credit score and history.
However, the specialist lenders who offer loans to individuals that are a higher risk because of unemployment, and/or have a poor credit history are an option that’s available to you. Take the time to compare the rates of these companies.
Even though you will have to pay much higher interest rates, taking one of these specialty loans provides you with the opportunity to show that you are reliable and trustworthy when it comes to repayment, and it can be the best option for your situation.