For instance, a payday loan – which is usually offered for people with jobs – can also cater to self-employed borrowers or recipients of benefits. The usual postdated check is not necessary anymore; however, it still needs to be repaid on the next payday. Nonetheless, it is beneficial for recently unemployed borrowers who need financial assistance as they look for a new job. But why is this so? Why are there lenders accepting borrowers despite the absence of a stable income? Why would they risk their business just to accommodate the needs of others? The answer is simple. Lenders will offer a loan in exchange of expensive interest rates. This minimizes the risk by discouraging those who cannot compensate for the debt.
That being said, unemployed loans are easy and quick to acquire. There’s no need to follow the traditional complicated method of borrowing money, and there is no plethora of paperwork required. All you have to do is to fill out an application form with your personal and financial details like name, contact number, bank account, and other confidential information. Here are other benefits of unemployed loans that will help you decide whether it is right for you or not:
Fast And Smooth Transaction
Unemployed loans are beneficial because you don’t have to wait for a longer time. The lender knows how important it is to have money in the soonest possible time especially when you have no income. In as fast as one hour, you can have the money delivered to your bank account, providing that you have submitted all the lender’s prerequisites. This means that you can use the money to resolve emergency bills and sudden expenses.
No Credit Check
Late payments? CCJs? Defaults? If your credit report is badly damaged by this or other financial mistakes, unemployed loans are highly beneficial. Most private lenders won’t conduct any credit check, unlike banks and traditional lending facilities, and if they do, they will only use the credit rating to determine the amount you can borrow and the interest rate to be applied.
Unemployed loans are simply hassle-free. All you have to do is complete an online application form online and it takes less than 10 minutes to complete. In case there are additional documents required, you may submit it through email or fax.
The loan requires minimal requirements but not everyone can apply. As the name suggests, you must not have other sources of income, literally. This includes anyone working on a part-time basis. The loan is intended to provide a financial support to jobless individuals until they find a new job.
It’s also important that you met several conditions first so as to lessen the risks on the lender’s behalf. First, the loan candidate should be jobless within 6 months or less; if you’re unemployed over the required period, your application will be rejected. Being unemployed for a short period of time gives you a chance to find a new job again at the soonest possible time.
It’s also important that you are of the right age and with the required residency. Only those who are over 18 years old and with a UK resident or citizen are accepted.
Getting Unemployed Loans With The Help Of A Guarantor
Despite the risk of lending money to someone who has jobless, thus has no capability of repaying the loan, there are still a good number of loan providers who are willing to accommodate their requests. But this doesn’t mean that all the unemployed individuals can go home with a loan on their hand anytime. If you want to increase your chance of getting approved, you can consider a guarantor.
Almost any loans providers are more lenient to individuals if they can provide some sort of security, regardless of their credit remark. You can pledge collateral if you can; but in case you have no property, you can bring another person to cosign and guarantee the loan. This means that the other cosigner will repay the loan in the event of default. That being said, the role of the guarantor is serious as it can damage his finances when the unfortunate event comes. So as a guarantor, be sure that you know and trust the borrower first.
The responsibilities of the guarantor also include vouching for the debtor’s financial capability and verifying his identification. Unemployed individuals and people on benefits can use to increase their chance of getting approved. Anyone who is not financially-linked with the borrower can be qualified as a guarantor. However, he must have an excellent credit score, high income, and a homeowner.
This is also ideal when you have no work and you’re unemployed. But if you want a better deal, be sure to work on your credit report first. Ask for a free copy from a credit agency and be sure that every detail entered is accurate, otherwise, report it directly to the agency. List all the unpaid and settle each one by one at a time. You can negotiate with the lender if you wish as some of them may waive fees, reduce the interest, or alter the loan’s due date. Otherwise, you may look for a debt consolidation program. Use the loan to compensate for all the debts in one single payment and ensure that you will not miss any payments again in the future.
305.9% APR. £400 borrowed for 90 days.
Total amount repayable is £561.92 in 3 monthly instalments of £187.31.
Interest charged is £161.92, interest rate 161.9% (variable)
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Rates from 45.3% APR to 1575% APR – we provide a no obligation quote, your APR will be based on your personal circumstances