When it comes to bad credit loans, it is usually a requirement to be employed or self-employed to be eligible for a loan. However, t here are people in the UK who are currently living on benefits and have no full-time job. These people deserve to get loans just like employed people to live up to their daily and emergency needs as well as a few desires they might have. They are now entitled to payday loans after fulfilling certain criteria with repayment period from 12 months to 60 months. There is no upfront fee for getting this type of a loan and therefore it is flexible and easy to secure.
Loans for unemployed come under the category of bad credit loans with more advantages than disadvantages. A less than perfect credit history has absolutely no impact on such a loan. You can get even a huge amount of up to £25,000 depending on your past record and employment history. All you have to do is provide proof in the form of documents and get approved. In most cases, the money gets transferred to your account almost instantly or within 24 hours for these types of loans. Since they are meant for fulfilling emergency needs, the lenders understand this concern that you might be in need of funds immediately. Moreover, they are aware of your unemployed status and are willing to help you get out of financial difficulties quickly.
One way to check the credibility of an unemployed person in the UK is to check whether they are homeowners or tenants. There is an opportunity to check online if you’re eligible for a certain type of loan depending on the information you provide. Some plans may require an upfront fee because there is a need to get a security check because of your employment status. P eople on benefits can arrange for a small upfront fee and this is what confirms their credibility to acquire a loan. It is advisable to compare various loan plans to see which one is best suited to your current financial situation. Once you have decided on a plan, you can find out your chance of approval online and then make final arrangements.
There are a few drawbacks that you must consider before applying for a bad credit loan if you’re unemployed. You will be given a much higher interest rate than average. Bad credit loans are not designed for people who already have many debts to pay. It often becomes difficult to arrange for finances when repayments are due because of no monthly income and therefore it is recommended to stay with the shortest time period loan. Moreover, it is not possible to get an amount higher than £25,000 in most cases, which might not be suitable for those who need money for building a new home, buying a new car, or any other large scale project.
The biggest advantage of securing loans for unemployed is to improve your current credit rating. This requires making repayments on time within the time period you choose. It is possible to extend the repayment period up to 60 months but it is advisable to for people on benefits to secure shorter term loans to be in a better and more realistic financial position. Loans for short time period are easier to return because of the fixed interest rate. You can either choose to pay weekly or monthly depending on your ability to arrange for finances. Make sure you have calculated your total repayable amount after adding interest to determine if you would be able to achieve it within the specified time period.
Some loans for people on benefits in the UK do not require any upfront fee. However, when this is the case it might not be possible to obtain loans of more than £2,000 in value. Since the loan amount you’re eligible for is calculated based on your salary or pay scale, in a case of jobless people some other criterion is chosen. A nominal interest rate is decided for these types of loans considering the person on benefits might not be able to afford a high-interest rate. However, he or she will have to be content with the specified loan amount, which ranges from £500 to £2,000.
There are trained loan experts or agents provided by credit brokers in the UK to discuss everything before you apply for a specific bad credit loan. This is to make sure that you don’t accidentally put yourself in a more difficult situation than you are already in. It is, therefore, important to perform an analysis of how exactly you are going to make the repayments on time. Some people might already have an appointment letter in hand. Their application for a loan is considered differently than those who are currently seeking a job. These loans are also known as no guarantor loans and therefore do not require any guarantee from a bank or a private organisation.
The lenders are willing to pay the requested loan amount because the transactions are being handled by a third party, also called a credit broker. It is completely safe to carry out these transactions because hundreds of people apply for bad credit loans on a daily basis and most of them get approved. If there were many defaulters, it would not have been possible for credit brokers to run their business. The testimonials given by real people also help to establish the credibility of a broker before you decide to do business with them.
Presently being unemployed does not mean you have no chance of getting a decent job in future. This is one consideration that is taken into account by credit brokers such as CreditPoor to help these people get out of a financial difficulty and start afresh. Even a bad credit score can be mended during your unemployed months by arranging for repayments on time. There are special loans designed for job seekers who wish to improve their current financial standing and these are known as unemployed payday loans.
Kara Perez is the original founder of From Frugal To Free. She is a money expert, speaker and founder of Bravely Go, a feminist financial education company. Her work has been featured on NPR, Business Insider, Forbes, and Elite Daily.