Are you unemployed or recently self-employed? Don’t know if you’re going to get approved for a loan? Well, you don’t have to play the guessing game any longer – keep reading and get to know all the necessary info on the matter.
Can I get a loan if I’m unemployed?
Sure! Many lenders consider currently unemployed people for a loan if they are earning some form of income or have other suitable assets for repayment. Welfare or a regular deposit from investments count as such, so does self-employment.
Usually, providers will ask you for your banking history and other financial documents to prove that you’ll be able to pay back. Got bad credit? Check out Bad Credit Loans in Alaska to find a solution to your problem.
6 Things to Remember Before Taking Out a Loan
- You must have a plan on how you’ll be paying off your debt. A lender will think about this while considering you for a loan, so your eligibility depends on it. Consider borrowing a small amount, like a $1,100 loan so that managing the repayments will be easy.
- Make sure you are eligible. Not only your ability to pay off the debt is considered. If a lender has looser rules about employment, it could mean they’ll have stricter ones on something else.
- Receiving welfare can be a good thing when comes to applying for a loan. A lender will consider such funds while they evaluate your ability to pay off the money you’re borrowing.
- You might opt for a quick repayment plan, that has short terms. You don’t have to be employed for this one, just have an alternate source of income, even though you must repay it by your next payday along with the interest.
- Beware high APRs, when taking out a short-term loan. Of course, this way you’ll be able to pay off fast, but you’ll have to give out much more in fees and charges than you would with the loan from a bank.
- Pay attention so you won’t be overdrawing your account with automatic payments, as most lenders would debit directly from your bank account.
Another key thing to know is that payday loans, installment auto title loans can lead you into the cycle of debt if you don’t have sufficient funds. Some people take out more and more loans in order to pay off the first one, borrowing bigger amounts of money each time.
Therefore you must always consider alternatives before getting a loan, such as local resources (government-funded or non-profit organisations and charities, that provide those in need with food and shelter), extensions on your payments, side jobs or additional projects.
How to Qualify for a Short Term Loan?
It generally depends on the provider and the sum you’re planning to borrow. It’s always best to check the specific criteria before applying, but here is a list of some possible requirements:
- You have to earn a specific income. You don’t have to be necessarily employed, but you still have to receive some regular payments, like welfare or investment income.
- Your credit score has to be good. Even though some lenders are willing to let the negative credit rating slide, everything has its limits. If you’ve got bad credit be sure to check out Bad Credit Loans in Hawaii – you might find good deals there.
- If you own some vehicle or property (say, a car, a boat or a house) it can be used as a security for the loan, so you’ll get a bigger chance to get approved.
- If you’re a member of the military, you’ll have to learn about short term options available for you, as consumer lending regulations protect military members from unfairly high-cost loans, including payday loans.
Remember, that you have to calculate your budget carefully, to see, what amount of money you need, and then check if you qualify for it. The bigger the amount the riskier it is for the lender, so you can generally get approved for a $500 loan with no hassle.
Another Way to Increase Your Chances of Approval
There’s still one more trick to use if you’re unemployed and in the case of financial emergency. Applying with a cosigner or a joint applicant can improve your eligibility. This person can be a friend or a relative – someone you have close relationship with. If you don’t meet the criteria for approval, and they do, they might boost your chances significantly, and some lenders even encourage people to get loans with a guarantor or a co-signer. Of course, such step requires responsibility from another person and it’s not always easy to find someone quick, who is willing to share a load with you.
It’s not the end of the world in terms of borrowing money when you’re unemployed. If your budgeting is good, and you can manage your payments with some other type of income, you can count on some lenders to give you a pass.
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