Personal Loans for the Unemployed
In times of economic recession and slow down, common consumers fell prey to several different obstacles, such as credit crunches and cash crunches, lay offs, inflation, etc. The final effect was chaotic with several bankruptcies and foreclosures leaving consumers in an almost hopeless situation, plus unemployment. Today, as of date, a large number of consumers are reviving their personal finances and are largely in need of credit and loans for the unemployed the genesis of several economic activities and new developments. This is where loans specifically catering to the unemployed come into the picture.
These loans are today being availed by a large number of people, including job seekers, professionals working as consultants, self-employed businessmen, and people working on a stay-at-home basis. The loan is being principally provided by private lenders, while some selected banks and credit institutions also stepping into the lending market.
Features of Personal Loans for Unemployed
The following are some distinctive and meritorious features of unemployed personal loans.
- These personal loans are loans for unemployed, hence in maximum cases, irrespective of an excellent credit score, these loans are secured loans. There are some exceptions to this rule, but when the loan is an unsecured loan, smaller variants are provided. The positive point is that the loan is principally a small denomination loan, and is repaid in a couple of installments.
- Unsecured personal loans, in some cases, are also provided for business purposes. Hence, the approval process is largely based upon the legitimacy of the business operation, rather than the credit score.
- Unsecured personal loans for the unemployed are usually provided to people with good credit scores, or people who have a steady and assured source of income from a personal business venture. You will rarely find a personal loan variant such as loans for the unemployed with bad credit, being unsecured.
- The loan is a personal loan, hence, there is no need to state the need, or purpose, of the loan.
- The principal or the denomination amount of the loan is not decided or does not have conventional denomination like those of payday loans or auto loans. The loan can be a big one lasting for several billing cycles, or it can be as small as a single installment loan.
- The standard rate of interest of such a loan is high since the risk factor is also high. Furthermore, the rate of interest can also be calculated on the dated credit score.
Overall, these personal loans are conventional loans for the unemployed that are not very hard to avail.
How to Get Loans for the Unemployed
Yet, there can be some barriers that might hamper and strain the entire process of borrowing. In order to get the personal loan, you will need a reasonable credit rating, preferably something above 620, according to FICO standards. You will also need quite a good credit report and the lesser the defaults in credit history, the better is your chance of getting the loan. Apart from that, a good score ensures a low rate of interest.
If you are able to find collateral, such as your car, ornaments, securities, bonds, real estate or equity, you will also be able to get a really low rate of interest. The last requisite is that you will have to give proof of having a regular income through some or the other source.
The best option that you can use to get the loan, is to improve your credit report and find good collateral.