Finding Bad Credit Loan for Unemployed
When you are unemployed, it can be an extra challenge to rely solely on the allowances given by the government. There are financial emergencies that leave you battered and broken, unable to think of a way to get any funding. To help out, many loan companies are reaching out to offer bad credit loan for unemployed individuals.
Emergencies happen all of the time, and no matter what you’re the situation is, you are bound to take action to find a solution. This is even if you know you have bad credit scores and the fact that you are unemployed. For most lenders, these two criteria are already red flags for approval of loan application. They may deny the application outright because it is a big risk to give out loans to people who have bad credit record and unemployed at the same time. But who help these people in times of emergencies?
Bad Credit Loans for Unemployed
The good thing about today’s lending industry is that they keep evolving to accommodate different people in different situations. Being unemployed is not their choice and finding and holding a job can be tough. Government allowance may keep you through your basic needs but in case of urgent financial needs, it is not easy to find financing without proof of income or employment.
This dilemma has been addressed by online lending companies by designing loan products, especially for unemployed borrowers. This chance to apply and be approved for a loan eases out the worries about their pending bills, urgent expenses and gives them hope to improve their current circumstances.
Loans that are Meant to Help You Out
Bad credit loan for unemployed has assisted thousands of unemployed borrowers by giving them urgent financial assistance to meet their needs. These loans are unsecured and free from credit checks. They are easy to get and apply for. These lenders will simply rely on your government allowance as proof of your income and your capability to make repayments based on this.
Most of the time, unemployed borrowers use the loan proceeds to apply and search for jobs. They use it to supplement their daily needs and support their families. There are also instances that they need the loan for medical emergencies, home, and car repair and others.
Types of Bad Credit Loans for Unemployed That You Can Avail
Loan providers have designed various loan products to serve the needs of different individuals. For people with bad credit and are unemployed, here are some of the options.
Bad Credit Loans – These loan deals are offered to most borrowers and even if they are not regularly employed they can take out a loan by applying for this product.
No Guarantor Loans – Finding a guarantor can take a while and if you have an emergency, this is the type of loan that you should apply for. It is easy to secure funds through this service but be aware of its high-interest rates.
Debt Consolidation Loans – for those who might have fallen into several debt traps, this is the best way out. This loan product will help cover all pending payment dues and you can focus more on getting a new job and fixing your credit rating.
Text Loans – By the name itself is quick and easy to avail. It has proven to be ideal for most unemployed individuals as it does not require credit checks.
Applying for Bad Credit Loan for Unemployed
Having bad credit and being unemployed may be too gloomy to look at, but on the bright side, there are now hundreds of online lending institutions that offer loan products for people with bad credit score and unemployed. The application is conveniently accessible online, thus there is no need to travel to a traditional lending company location.
All you need to do is fill out the application form and get pre-approved. You will instantly be advised to provide necessary documents like proof of identification, legal age and proof of income for your application to be validated. Once your application meets all the requirements, the company will approve your loan and transfer the loan amount proceeds to your account. The process takes a short while and sometimes, borrowers can access their funds on the following business day.
Are all payday loans the same?
While the aim of all payday loans is the same—to help individuals get access to immediate cash for urgent expenses—not all payday loans are made alike. Lenders have their own specifications when approving a loan request, depending on their terms and conditions, company policies, and the amount of risk they are willing to take when offering unsecured loans.
They differ significantly in the loan amounts and payment terms offered and especially in the interest rates charged on top of the principal loan amount. With all the different loans available, it’s important to choose the right type of loan and lender that will best meet your immediate financial needs.
Do I have a chance to get a loan if I am unemployed and have a bad credit history?
While lenders used to quickly reject loan applications from unemployed individuals, especially those with a bad credit history, most lenders nowadays are opening their doors to cater to this specific group of customers, although the options are quite limited given that an important consideration when granting a loan is the borrower’s capacity to pay. Also, interest rates for this kind of loan are higher.
How do I qualify for a loan if I am unemployed and have a bad credit history?
Short-term loan options are now being actively offered by loan providers to individuals who currently have no full-time jobs and even those on welfare. There are only a few basic requirements that must be met.
First, due to legal considerations, only UK citizens will be eligible for the loan and he or she must be over 18 years old when the loan is applied. Proof of an alternative income must also be submitted to show that the borrower has the capacity to repay the lender. Finally, an active bank account under the borrower’s name must be available, as this is where the funds will be deposited through electronic transfer.
However, it’s good practice to always check with your lender if there are other specifications that you need to meet, and always read the lender’s terms and conditions. Also, do not hesitate to ask questions if there are things not clear to you.
Do I need a guarantor if I am unemployed and have a low credit score?
Since one major consideration of lenders when approving a loan application is the borrower’s ability to pay off the loan, some lenders may require the borrower to have a guarantor.
A guarantor serves as a second party who will also sign the loan contract to guarantee that if the actual borrower fails to complete the terms in the loan contract, the guarantor will continue the payment until the loan is fully paid. A guarantor serves as a safety net for the lender since granting a loan to an unemployed individual who has a bad credit history is coupled with a high probability that the borrower might not be able to complete the payment.
However, there are also lenders that will take loan applications without a guarantor, but the options are limited and the approval rate is usually low.
What alternative sources of income are considered?
For a lender to accept a loan application from someone unemployed and with bad credit history, it is an important prerequisite that the borrower must be able to show proof that he or she has an alternative source of funds. While the options are very few and while the loan is not guaranteed, if you have any of these other sources, your chance of getting a loan while still out of regular work will definitely go higher.
Pension, child support, welfare benefits, alimony, and other forms of financial aid are considered by loan providers as an alternative source of income. If you have rent coming in from a property, this can also be alternative income. You just have to show a proof that indeed the rent income is going into an account under your name. Also, if you have a trade or a skill that you use while currently unemployed, the money you earn from your trade can be considered as your alternative source of funds. Again, you just have to show proof that you have funds coming in.