What is the Loan Options Available for the Unemployed?
Having enough savings to meet all expenses unless you land a new job seems like a dream. Entertainment, takeaways account for no emergency cushion. Although you know that your job is not secure, you do not bother about putting aside money as long as cash is coming in. You rue the day when your employer lays you off. Being unemployed is painful, but you can easily deal with this situation of you have some savings.
It ensures that you can at least meet your regular expenses unless you land a new job. Savings are crucial even though you are likely to get unemployment benefits. Conventional lenders do not allow the unemployed to borrow money as it increases the default risk, but direct lenders follow lenient policy and allow you to borrow money when you need it.
Though you can get money easily, it does not mean that you will borrow for impulsive purchases. You should avoid applying for as long as you do not have an emergency. Unemployed loans come with high interest rates, so make sure that you do not borrow money for a reason other than unexpected expenses. If you have a bad credit rating, you are likely to get an expensive deal. Make sure that you have compared interest rates of all loan offers. Here are the types of loans you can apply for during unemployment.
Doorstep loans for unemployed
As you lose your job, you may need to borrow money for any small expenditure. It can be anything like medical bills and utility expenses. Since the credit need is small, you will take out a short-term loan. Instant Doorstep loans are an ideal option when you need money to fund any unforeseen small expenditure. The repayment length of these loans is very small, not more than a month.
Getting these loans are so convenient that you do not need to have a bank account. As you apply for these loans, the representative of a lender will visit your home, discuss your credit needs and repayment capacity. If you qualify for the loan, they will hand money to you. The same representative will come at your doorstep to collect funds on the due date. You can easily qualify for these loans even if you have only unemployment benefits.
Instalment loans
Since you are out of work, it does not mean you will not need money for bigger expenses. Emergencies do not inform you before knocking on your door. What if you step down to start your own business? You may need some amount of money to fund your business. Some borrowers consider taking out business loans, but they are more expensive than instalment loans for bad credit. Further, you must have at least two years of experience in running the business to get money. A lender accepts business loan applications from borrowers who have good credit history.
In fact, if you need a big amount of money for any other reasons, instalment loans are an ideal option. You will pay off the debt in instalments. The good thing is you can ask your lender to switch you to a lower interest rate deal as you get a job. A steady source of income lowers down the chances of default and the lender will allow for a lower interest rate deal. However, you must have a good credit rating.
The bottom line
When you are unemployed, you may need money for both small and big expenses. If you need money for the former reason, you should take out doorstep loans for unemployed, and if you need money for the latter reason, you should take out instalment loans. Well, whatever the loan you apply for, make sure that you have the repayment plan.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.
