It used to be a challenging process to get cheap installment loans with low interest rates. Fortunately, this is no longer the case. People have destroyed their credit rating, resulting in a global financial crisis. In response, many lenders have flocked to the market in order to cater for those with poor credit history. The competition is so fierce, even the unemployed have a fair chance of securing a substantial loan.
Soon to be employed?
Having a low paid job can make it easier to secure a loan in comparison to those without a job. However, there are now lenders prepared to give you cash if you are on your way to gaining employment. They are willing to support you and your family until that first paycheck arrives. They can hold off a whole month before requesting for the first installment.
Where to find a loan
Although banks and credit lenders are trying to compete by lowering their interest rates, they are still unwilling to take the risk when it comes to those with no guaranteed income. Therefore, your best bet is to check the Yellow Pages and newspapers for other lenders. If you have access to the internet, browsing the web for loans available to the unemployed is a good starting point. You will get a variety of lenders who can make you an offer. Be sure to check if they are a legitimate creditor by visiting the Financial Conduct Authority (FCA).
Once you have narrowed down your search, compare the interest rates and repayment plans that are on offer. The ideal lender will be the one with the lowest interest rates and offering a suitable repayment plan to suit your needs. The application process with online lenders are usually simple and straightforward. Any documents required by the lender can be scanned and uploaded as part of the process. Once approved, you can expect to receive the funds within 24 hours.
Think long term
Even if you have managed to secure £5,000 while unemployed, make sure to read through the entire loan agreement carefully. A difference of 1% in APR can save you a lot of money over the life of the loan. Pay extra attention to the small prints to ensure you are receiving the agreed payment plan at the rates acceptable to you. Further, watch out for hidden and one-off charges as these can be excessive, and at times unnecessary.
Other things to consider
Sometimes, securing a loan while unemployed is just not possible. You have exhausted your savings and the prospect of employment is slim. Therefore, you might be required to offer your valuables or property as collateral. This will provide lenders with security to part with their money. Some lenders also accept the title of a classic car as collateral. Please note, they will have the right to seize and sell your property if you fall behind in your payments. Further, you can also take valuables such as jewellery, art and coins to a pawnshop to elevate your debts. These need to be small in value, usually under £1,000. Alternatively you can also use an up and coming bank such as Tesco Bank for Personal Loans.
Haley Hayward is an experienced writer at gblogo.com, where she’s credited with more than 200 articles covering everything from entrepreneurial stories to mental health at work.
She also oversees the Comment&Questions, which poses important admission questions to experts in the field, and regularly hosts webinars on various aspects of the business school experience.
Prior to joining gblogo.com, Haley honed her skills as a freelance writer, tackling a wide array of topics from petcare to car maintenance.
Haley holds a Master’s degree in English Literature from the University of Edinburgh, Scotland.