Loans for Unemployed
Applying for a loan when unemployed can put the applicant in a worse position beyond being declined, especially if they have neutral to good credit. In most cases lenders won’t even look at an application of an individual who does not have employment, those that do will have a difficult approval criterion and often will ask for collateral.
Those who are unemployed but have a source of income will have an easier time in getting approved as options greatly improve because they can show the ability to repay.
If you are unemployed and applying to multiple lenders, this can have a negative impact on your credit score which will further diminish your chances of qualifying for a loan in the future. It can also set you up for less than favourable terms if you do qualify as your credit score will have been impacted.
The best way to access cash or loans for unemployed people is to know your options and stick with them. Trying to apply to the wrong lenders will only diminish your credit score and set up lots of frustration do to the rejection.
Popular Options for Unemployed Loans
Apply with a co-signer: If you know a person with a stable income and willing to apply jointly, this will significantly improve your chances for a normal personal loan. Often time’s people ask their parents or significant other to co-sign.
Pawn Broking: This is one of the oldest forms of obtaining cash. Pawn brokers provide a quick and fair service which does not take bad credit or employment history into account. They simple ask for collateral and a small fee in most cases.
Microloans: Also known as payday loans or cash advances are another alternative; however, they generally require some form of income. Unlike banks, they have more flexible approval criteria but need to have customers provide proof in their ability to make the repayments.
Welfare: If you are on Centrelink there is a advanced payment service that they provide. This is similar to a loan as they provide you a lump sum of cash now from future payments. This does mean future payments will be reduced until the advanced is paid in full. If you are not on welfare, it may be a good idea to contact Human Services to see what type of financial assistance you may qualify for.
Non-Profits & Charities: There are loads of organisations out there who provide free or very low cost financial assistance. Depending on your situation, contacting your local non-profit or charity might be worth exploring, they may have lending options which includes loans for unemployed people.
Low Income Loans Australia: Is a great financial resource for those in a financial bind needing some assistance. They provide detailed information on a range of benefits and loan providers for those who are on a low income or unemployed. Visit http://lowincomeloansaustralia.com.au/unemployed-loans/ for some great information on how to get financial help while unemployed or if you are anticipating on becoming unemployed.
As mentioned, qualifying for a loan while unemployed can be difficult but there are options. Make sure that you understand your options and don’t put yourself in a worst position by accepting a loan with extremely poor terms or applying to multiple lenders in the hopes of qualifying and in turn, hurting your credit score. One of the best things you can do before applying for a loan is to talk to the lender about their products and your background. Be truthful and ask lots of questions, a reputable lender will let you know if its worth applying or not. They may also let you know through discussion, where you fall short. This is valuable information as you can then work to rectify issues.
For more information on ways to access money while unemployed or to earn an income from home, browse through our income management and personal finance categories.