Unemployed Loan

Unemployment is one of the worst conditions a person can experience. How do you support yourself and your family without a sufficient income?  In the UK, unemployed individuals are eligible for loans to handle such situations. Lenders of unemployed loans offer individuals sufficient money to meet their day-to-day expenses and they are also more lenient regarding the repayment structure. Emergency unemployed loans are disbursed to help unemployed people make a new start in life.

Both secured and unsecured unemployment loans are available. However, in most cases unemployed individuals don’t own any valuable items they can show as security. Consequently, most unemployed loans are unsecured. The borrowers may not have security and most likely don’t want to risk their homes or hard earned valuables in such a venture. Fortunately, lenders don’t insist on security even if the borrower owns a house.

Although unsecured loans are often hard for the unemployed to obtain, many lenders in the UK will offer these loans at a relatively higher rate of interest. The danger of not receiving repayment of the loan is the reason for such high interest rates. However, one advantage is that the deposit is waived. Factors such as the loan amount and rate of interest all depend on the borrower. For example tenants and students have a better chance of availing this type of a loan than a person who owns property.

Debt consolidation is also a viable option. This scheme can help reduce a person’s monthly repayments. The borrower may be able to save money if they’re paying high interest rates on store and credit cards. Taking their mind of immediate financial commitments and meeting day-to-day expenses can help them focus on obtaining a job!

Lenders like to be confident about the repayment capacity of the person availing this type of loan. What other sources does the unemployed borrower have to repay the loan? The lender should have some assurance of repayment. Former employers may offer redundancy pay, compensatory disability benefits or a one-income living allowance – any of these are sufficient. This extra income should be specified on the loan application.

The advantage is that lenders of emergency unemployment loans are compassionate towards people with no employment. Most of them will tolerate late repayment of the loan and some may even offer a grace period before borrowers have to pay the first installment.

Borrowers who have valuable assets such as their house that they can pledge as collateral have better a chance of availing a secured unemployment loan. The interest charged will also be lower. However, if the borrowers continuously default on the repayment, they risk losing their home or other valuable assets.

A career development loan (CDL)is a bank loan to finance work-related learning. The unemployed can use this loan to learn a new skill or to polish existing skills. This can increase their chances of obtaining employment. The best part is that repayments start only after one month from the course’s completion date.