Loans for Unemployed People – How Can You Qualify?
Can unemployed people qualify for loans? This is a common question that people without employment often finds themselves asking during times of financial emergency. The good news is that yes, you could still get a loan but it might be harder and you might not get the best terms. This is the reality that you would have to live with.
Getting a loan if you’re unemployed is understandably more difficult than if you had a job. In fact, there are some people with jobs and poor credit that are rejected for a loan (or vice versa). The most important thing to remember if you are in need of cash but have no income is that qualifying for a loan is not the main question. There are plenty of lenders who are willing to work with high-risk borrowers. The only downside is that you won’t qualify on standard terms.
To find a loan, you would have to focus your search on specialist lenders – the ones who offer loan services primarily for those who fit into this special case. And when you do find these lenders, expect to be charged with higher interest rates.
Before you embark on your search for lenders that offer loans for unemployed people, make sure to educate yourself first about the in’s and out’s of this type of loan.
Questions About Loans for Unemployed People
- Can an unemployed individual get a loan?
- How do you qualify without income?
- What are the eligibility requirements for unemployed loans?
- What is the minimum salary required for a personal loan?
- Are there lenders that don’t require income verification?
- What loans are available for those on benefits?
- What are the benefits of loans for unemployed people?
- What are the drawbacks of loans for unemployed people?
- How do you compare loans for the unemployed?
- How soon can you get the money?
- Why do you get refused for a loan?
- How do you improve chances of getting a loan?
- Can you qualify for a loan with alternate income?
- What factors do you have to consider before getting a loan?
- What if you have poor credit?
- Do you need a guarantor?
- Why does it make sense to build up your credit rating?
- How can Money Pig help find loans for unemployed people?
If you need money but you are unemployed, your options for getting a loan are quite limited. In fact, it might be easier for people with poor credit but has employment to obtain a loan. One of the primary eligibility requirements imposed by UK lenders for getting a loan is that you need to have full-time or part-time employment (or a valid source of regular income, such as your own business). In fact, there are lenders who identify a minimum income threshold in order to qualify for a loan. Lenders will indicate that you have to provide proof of your ability to make payments and an income source is a logical source for that.
While challenging, loans for unemployed people are still available if you know where and what to look for. If income is not an option, people with benefits can be considered for this type of loan, as long as your source of funds will be guaranteed over the duration of your loan.
Unfortunately, not all lenders in the UK can offer unemployed loans. If you are looking for one, you have to dig deeper than you normally would. Always check the eligibility criteria for every lender to ensure that you can have a successful loan application.
At Money Pig, we can help gap that bridge for you. We are working with a network of lenders in the UK and we can identify the eligibility criteria for each lender on your behalf. Thus, you will know exactly which lenders are able to provide a loan for unemployed individuals like you.
Getting a loan if you are unemployed is harder but not impossible. If you are unable to provide a source of income or proof of employment, it is likely that you will be denied for a loan. And in those rare instances that you are qualified, you will have a higher interest rate and less favorable loan terms compared to those with income and good credit history.
One of the best places to start if you are looking for loans for people without income is short term lenders or online lenders. They are more forgiving than banks and other major credit institutions (which refuse to work with those people without full employment). You can qualify even if you do not have employment or source of income if you have alternate sources of income. A few examples include benefits, pensions, or regular payments received from a partner (or ex-partner), among other things.
The eligibility requirements on loans for unemployed people vary from one lender to another. Before you submit your application, you have to look into the list of eligibility requirements first. But there are a few common requirements set by most lenders in the UK for this type of loan.
The first requirement is that you have to meet specific income criteria. This will vary based on the amount of money you wish to borrow. Employment is definitely not the primary factor of evaluation for this type of loan. But you will definitely need to provide proof of regular income in order to qualify. This is common when it comes to personal loans because lenders would want to know that you have the means to pay off the loan. Even if you are not fully employed, you can qualify as long as you earn a sufficient income.
Another common eligibility requirement from UK lenders for loans for unemployed people is the credit rating. Normally, if you are unemployed, you can qualify for a loan as long as you have a good credit rating. Each lender will set their limits and flexibility criteria on this. It is important to work with lenders who are flexible enough to provide loan even if you are unemployed or have poor credit, but not when both cases apply.
Lastly, some lenders might be willing to provide loans for unemployed individuals as long as you have proof of personal and valuable assets. There are several types of assets such as real estate (your home), car, or anything you own that is of value. These items of value can be used by the lender as added security for the loan. But then again, this varies from lender to lender.
The minimum salary requirement for getting a personal loan varies from one lender to another. Each lender has their criteria for evaluating potential borrowers. If you want to know if you qualify, you can ask various lenders in the UK for a list of their eligibility criteria so you know which ones you might qualify for.
Unfortunately, no. All lenders require proof of income and employment as part of the eligibility requirements.
If you are unemployed but receiving benefits, you have a few other options for loans to apply for. One of them is a secured loan. A secured loan is that which involves the use of any valuable material in your possession to be used as collateral. An example of loan collateral is your home or car, depending on the amount you borrow. If you miss payments, these items could be repossessed. This makes your loan less risky because the lender has other means to liquidate your loan payments.
Another option for people who are unemployed but are receiving benefits is a high-interest personal loan. Many unemployed borrowers who qualify for a loan fall under this category, too. To mitigate the risks of borrowing, you will be given a high interest rate on your loan. The interest rate on your loan is directly proportional to the perceived risk of the borrower.
And finally, you can opt for payday loans. Lenders who offer payday loans are more lenient when it comes to the eligibility requirements of borrowers. But the interest rate is astronomically higher and they must be paid in a short amount of time.
If you obtain a loan for unemployed people, there are certain benefits that you can enjoy with this type of loan. It is important to know what these benefits are so you can take full advantage of them.
First off, most unemployed loans have a fixed-rate interest. This is a good thing because you are guaranteed that the interest rate on the loan won’t change, regardless of the market conditions. This will help you determine exactly how much you have to pay for a fixed period of time. You can budget your payments accordingly because you know exactly what to pay.
Most lenders would also choose the repayment term for the loan. Some lenders require you to pay it back over a short period of time. Meanwhile, there are also lenders who prefer a long term to keep the monthly repayments easy to manage. Either way, you will be able to benefit by a) being able to pay off the loan faster or b) making it easy to meet payments on time.
Most lenders do not require you to specify the purpose for the loan. But if you borrow money while being unemployed, make sure you use it correctly because you are paying interest for that money.
There are plenty of drawbacks that you can expect when you get a loan for unemployed people. One of the most common drawbacks is that you will pay a higher interest rate (versus someone who is fully employed).
Aside from paying higher interest, you can also increase your debt burden when you take out a new loan. This will cause additional strain on your finances. And when you fail to meet your payments, you could incur stiff penalties and this can hurt your credit score tremendously. Before you apply for loans for unemployed people, make sure you think about it first. Do you really need the money? Do you have sufficient source of income to pay for the loan?
When comparing loans for the unemployed, you can look at the eligibility criteria set by the lender. It is also a good idea to use an online broker that will point you towards the best lenders that might be willing to work with you.
Loans for unemployed people are one of many specific types of loans that are typically offered by short term lenders. These types of lenders have developed a streamlined process for evaluating application from borrowers such that they can get approval in a swift manner. Once approved, it also means that the borrower can get access to the funds as soon as possible, which is important especially during times of emergencies.
If you can meet the eligibility requirements and supply all the required documents, then you can get the money within the same day (for most lenders).
Even if you can provide proof that you have alternate sources of income (despite being unemployed), you can still get refused for a loan. Showing that you have other income sources does not guarantee that you will be approved for a loan because income is not the sole factor that lenders will look into.
You can get refused for a loan if you have poor credit, have previously missed payments, defaulted on a loan, or have multiple credit applications. Any or a combination of these factors can result in the rejection of your loan application. If possible, try not to apply to multiple loans at once. You have to apply to one loan per six months, if not less.
There are plenty of ways that you can improve the likelihood of getting approved for a loan. Aside from getting an employment that will provide you with a steady stream of income, another option is to build a good credit history. If getting employment is no longer an option, you can work on your credit score instead.
A lender will look at both income and credit score as two of the primary factors when evaluating loan application. If you are unable to meet both of these factors, your chances of being considered for a loan are very low. But if you have good credit score, it will improve your chances significantly because it shows your ability to make on-time payments or paying off a loan.
There is also a two-fold benefit when you boost your credit score. The first one is that you can get approved for your loan application and the second one is that it will be easier to get credit in the future.
Yes. There are many options for individuals who are looking to get a loan without a job. The only requirement that lenders would need is that you can provide proof of alternate income that will indicate your capacity to manage monthly payments for the loan.
Lenders will review the financial records you provide to confirm the validity of your alternate income source. A few examples of alternate income sources are government annuity, pension fund, and social security income. The qualifications required vary from one lender to another so you have to ask the lender directly about your options.
If you are unemployed and are planning to get a loan, there are several things to consider first. It is important to ponder on these factors so you can make the right financial decision instead of putting yourself in an undesirable financial situation.
The first factor to consider is if you have the capacity to repay the loan. The primary factor that lenders will evaluate upon applying for a loan is your means to manage the loan payments. If you are looking to borrow a small amount and you can provide proof of income to support payments, then you will likely be eligible for one. But the case is different when you are unemployed because you won’t have a source of income to use for making payments. As such, the lender will most likely not approve your loan application.
The second factor is that you should meet the other requirements. Simply having a source of income is not enough. If you have any other loans to pay for, it might be difficult for a lender to approve your loan since you will still have to repay those. It is important to look into other eligibility requirements set by the lender before you pursue a loan. Just because they might be flexible about your employment situation, it does not mean that they will be as flexible with the other requirements, too.
There are also a few other things that you should expect when you obtain a loan as an unemployed individual. Most lenders will require a higher interest rate on your loan to mitigate the risk of lack of a reliable income source. They would also require automatic payments, such as the monthly payments will be debited from your active bank account. And finally, most lenders will require a shorter loan length, which means you have less amount of time to repay the loan.
If you are unemployed and you have poor credit, getting a loan might be extra challenging. But this does not mean that all hope is lost. You can still qualify for a loan, depending on the evaluation of each lender. Like always, each lender has their unique approach to assessing each application. It is all about identifying which lenders are more open to people with bad credit or are unemployed. If you do get the loan successfully, expect higher interest rates, though.
There are many UK lenders who are willing to work with people who have bad credit, as long as you can provide proof of employment or income. But if you have neither of the latter, your best bet to qualify for a loan is to get a guarantor. A guarantor is someone who will co-sign the loan, who has preferably a good credit history.
Once your guarantor has co-signed the loan, it lessens the risk associated with the loan because the guarantor will be equally liable for the loan. Not all lenders will require a guarantor, though. But you might find it difficult and more time-consuming looking for lenders who are willing to give out loans to those without employment. If, however, you receive benefits, you might get a loan without the need for a guarantor.
If you are unemployed and have poor credit, then it would be more difficult to qualify for a loan. These are two of the common factors that lenders evaluate in order to determine if you are fit for a loan. If you were rejected due to poor credit (aside from lack of income), use this opportunity to build your credit rating. In fact, it is a must before you apply for any loan product.
By building your credit, you put yourself in a more stable financial stead. It will also enable you to get approved for other loan products in the future. At the same time, a good credit standing can be leveraged so that you can get better interest rates in future loans.
Money Pig is an online loan broker. We specialize in helping people with financial difficulties to get a loan by showing you which lenders are best suited for your circumstances. If you are unemployed, your options are limited but we can help you compare through an extensive panel of lenders in the UK to find the right match.