How Can Unemployed Individuals Get a Short-Term Loan Instantly?

by Carol Adams Financial Adviser

Every person struggles in the unemployment phase. One finds it challenging to hit priorities along with meeting emergencies.

Sometimes, an unemployed individual needs immediate financial help, like -making timely rent payments, paying electricity bills or subscriptions. In the absence of a consistent income, one switches to other alternatives, like loans, to arrange for liabilities.

Lenders prefer employed individuals with a stable income as an ideal borrower. It eliminates any hassle associated with losing money or defaulting on debts.

Does that imply unemployed individuals cannot get the loan?

High street lenders indeed reserve their products for individuals with good credit standing and repayment capability, but unemployment doesn’t imply failure to secure one either.

Contrary to high street lenders, some lenders provide no paperwork loans for the unemployed. In this, lenders prioritise other repayment proof than income.

Can A Jobless Person Borrow Money?

Yes, a jobless person can borrow money online. Applicants who have inconsistent income or are undergoing an unemployment phase might not get loans at credible interest rates. It means lenders provide the needed sum to individuals with limited flexibility. Unemployed individuals may get loan approval at the smallest repayment proof.

In the absence of a regular income, lenders may ask for alternate repayment proof. You may provide the security over the loan as spouse's income, dividends, income from government grants, part-time income, pension, rental income, etc to the lenders.

However, if you are seeking loans for the unemployed on benefits, your luck may not favour you every time. The reason is that there are only limited lenders who consider income from government grants as valid repayment proof.

Lending terms vary from lender to lender and according to your needs. The basic eligibility criteria remain the same.

What Are the General Criteria to Get Loans on Unemployment?

It is possible to get a loan on unemployment. Individuals seeking loans on unemployment would have to qualify for the basic criteria. A lender identifies and scans an important aspect of the credit report:

1) Number of missed payments

2) The total debts the person already has

3) Total number of high-interest debts on a credit report

4) Has the borrower suffered any bankruptcy in the past?

5) Recent financial behavior

6) The number of CCJs a borrower has on the credit report (if any)

7) The frequency of loan rejections faced by the borrower

8) Whether the borrower is a permanent citizen of the country or not,

9) Whether or not the borrower has a guarantor.

The lender analyzes these aspects to ensure comfortable lending for the lender and himself, too. While undergoing unemployment, lenders usually provide loans at higher interest rates and costly repayments.

Are There Any Short-Term Loans One Can Qualify for If Unemployed?

There are multiple loan offerings for out-of-work individuals. These loans do not have complex loan qualification criteria. It means you can apply for these loans in case of urgent need. Let’s discuss the right loans to approach:

1) Payday Loans

Payday loans are offerings that are ideal for short-term money needs. This help cater to an immediate/emergency without waiting until the next payday or salary day. One can borrow up to £1500. The lenders here base income proof on the primary criteria for approving the loan. Unemployed individuals can provide repayment proof in other forms than income. It usually has a 30-day repayment tenure. It is an unsecured loan.

2) Doorstep Loans

Doorstep loans are instant cash loans that a lender provides at the door of the individuals. These loans help meet a small need for up to £1000. Anyone can apply for a loan without bothering about their credit score. One can apply even without an account. If you need urgent cash to meet a medical emergency or pay for a subscription, etc, you qualify. It is ideal for specially-abled and old individuals who cannot make it to the bank to get help. It is a collateral-free loan.

3) Guaranteed loans

Guaranteed loans are the offerings where one can receive the loan by presenting a guarantor before the lender. Usually, a guarantor is someone close to the borrower. He can be a mother, father, sister or brother. It is primarily a blood bond one shares.

If one lacks credible income proof, one could qualify for the loan. Here, the guarantor works as a guarantee. The guarantor agrees to the loan terms and conditions, stating the repayment of the loan if the borrower defaults.

Having a guarantor may help one fetch a loan at relatively low-interest rates. These loans are ideal in case of emergency financial needs like- boiler replacement/repair, medical bills, and tuition fees. The loan help improves credit score as well. While applying for guarantor loans, check the APR and the total repayments. It will help you plan things accordingly.

Getting a guarantor is tricky. If you cannot have one, you can get help by putting up collateral.

4) No guarantor loans

As the name symbolizes, one does not need a guarantor to get the needed help. These loans need affordability. Some lenders provide loans for the unemployed with no guarantor to individuals who do not have someone to guarantee the loan. Lenders here provide loans to individuals with less than perfect credit as well. One can take it for unexpected bills- car repairs, insurance premiums or medical bills. A borrower can choose a flexible repayment term.

5) Secured loans

Secured loans work differently from payday and doorstep loans. Unlike these loans, secured loans offer more flexibility to borrow. If an unemployed individual wishes to borrow a good amount lacking solid income proof, he can go for secured loans.

In this, one may get the confirmed loan by outing up collateral. It could be anything like- belongings, dividends, property, car, etc. Once the lender receives the desired security, he may provide the loan at comparatively low-interest rates.

6) Installment loans

Instalment loans are especially for individuals who want to borrow anywhere from £1000-10000. These are both short-term and long-term loans. The most common uses once can apply for these loans include-home improvement, medical emergency, consolidating debts, marriage, birthday parties, or business investments.

One gets the loan regardless of the credit score. The lenders provide loans basing the recent financial behavior of the borrower. Before taking an instalment loan, analyze the repayment capability. Instalment loan arrears can lead to a fractional drop in credit score.

These are some popular loan offerings that an unemployed individual can consider in financial need. Analyze the loan criteria, the repayments and the APR before signing the loan.

Description: How can unemployed individuals get a loan? What are some popular loan offerings for jobless individuals?