A simples guide

Loans for unemployed people

When you’re in-between jobs it can be hard to make ends meet, everyday demands on your wallet can feel like an uphill struggle and you might imagine there are no options open to you. But that’s not true, there are options, you just need to know what you’re getting into.

 

That’s where we can help, in our guide to unemployed loans, we’ll tell you straight how they work and what you can expect. By comparing the market with us, you can choose from a selection of loans specially designed to help you whilst you look for work.

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Are loans available for unemployed people on benefits?

Yes, there are. There might not be as many options compared as if you weren’t unemployed or claiming benefits but there are still loans available.

Traditionally, you’d stand more of a chance of getting loan if you’re employed, if you’re a home owner and can show enough income to pay off whatever you’ve borrowed. More importantly, if you can show these things, the interest rate will probably be relatively low. Of course, when you’re looking for work that’s usually when you’re in most need of some ready cash but that’s sadly when those low interest rate loans are just out of reach.

But it’s not just the absence of a steady job that could go against you, your credit history also plays a part too. If you’ve missed payments in the past, and your credit rating isn’t so great, then lenders might see you as an even riskier candidate to lend money to. Having any County Court Judgements (CCJs) may also work against you too.

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So, what type of loan could I get?

The sort of loan that you’ll be able to get will probably have a higher interest rate than a standard loan. The APR is the annual percentage rate – it’s the amount of interest you’ll have to pay on top of what you’ve borrowed and it includes any fees that the lender’s added. Looking at the APRs on a loan could be a good way to gauge what loan might work for you but it’s always important to read the small print.

Most lenders will want some sort of guarantee that they’ll get their money back so you might find some loans are available if someone will act as guarantor on your behalf. All this means is that, should you be unable to make a payment, your guarantor will cough up instead. Other lenders might want an asset as security which means the money is loaned against something you own – perhaps your car – if you default on the loan the lender gets your car

piggy bank

Do all loans for the unemployed have high interest rates?

There’s no way to sugar coat it – sadly in the majority of examples, the interest rates will be high. But you do have a choice of which lender you choose, so just because one lender has an eye wateringly high interest rate, doesn’t mean that all unemployed loans will have equally sky high levels of interest.

How can I avoid being in this situation again?

We all get into sticky situations and sometimes an unemployed loan is the way out. If you’ve made the decision that it’s the right loan for you then make sure you pay the instalments on time and in full.

To avoid any future hiccups, you can look at improving your credit rating. Doing simple things shown in the list below should help you:

- Check your details are correct with the credit reference agencies such as Experian, Call Credit and Equifax

- Put your name on the electoral register – lenders like to check you live where you say you do

- Don’t apply for lots of different loans or credit cards at the same time – if you keep getting rejected it’ll show up on your credit report

- Always, always pay your credit cards and loan payments on time and in full

Whatever you do, don’t panic. We can help find you a loan even if you’re unemployed. All you need to do is compare the market with us to find one that’s right for you – no fuss, nothing complicated, just simple.

 

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