Loans for Unemployed People
If you’re not currently working and have had some unexpected expenditure arise, it can be comforting to know that loans for unemployed people are available.
Living on benefits isn’t easy — even if you have enough money to cover your day-to-day living costs, it’s difficult to know where to turn when something unexpected happens and you don’t have the money to pay for it. Whether that’s a broken boiler or car repairs, an unexpected bill or something worse, the panic can set in when you just don’t know where you’ll find the money to deal with the situation.
Explore all your options
When you need a bit of extra cash, your first thought may be to visit your bank or building society and ask about a loan. Unfortunately, most financial institutions on the high street are simply not willing to lend to customers who aren’t currently in employment. Many won’t even take your enquiry as far as an application, but will just inform you that there’s no point applying as you don’t fit their lending criteria.
There are solutions out there, however — loans for unemployed people on benefits are available from hundreds of specialist and reputable lenders in the UK. The best way to learn about these deals is online — many companies offer their loans directly through the Internet, and others are available through online brokers or referral companies, who will search the market for the best deal to suit your exact circumstances.
By using a broker, financial adviser or price comparison site, you’re almost certain to find the best possible deal on loans for unemployed people. However, it can help to check whether the company you are dealing with search the whole UK loan market, or just refer business to a few selected lenders.
Comparing loan rates
Under UK regulations for financial institutions, all lenders have to quote the APR or Annual Percentage Rate for their loan deals. The APR is the best reflection of the equivalent interest you will be charged over a year, and may differ from the ‘headline’ interest rate used in some loan advertising. By comparing the APR between different deals, you can be sure that you are comparing ‘like for like’ and this can be a good way of finding out who is actually giving the best deal.
If you are unemployed and your only income consists of state benefits, you should be prepared to pay a higher rate of interest for your loan than you might expect on a ‘normal’ loan from a bank or building society. Unfortunately it’s a fact that loans to unemployed applicants represent a higher risk to the lender, and they therefore price their rates accordingly.
Some lenders do charge application fees, normally up-front, to take out a personal loan, however not all lenders do — search online for ‘loans for unemployed no fees’ if you specifically need a loan with no up-front costs.
As with any type of borrowing, it’s important to be honest — with yourself and with the lender — about whether you will be able to afford the loan repayments. If so, it can be reassuring to know that loans for unemployed people are available as a solution to your short-term cash flow problems.
