Unsecured Loans For The Unemployed: Why No Income Is No Problem

It stands to reason that anyone that is unemployed should believe their opportunities to get loan approval have gone. But this is not actually true, and there are lenders willing to grant unsecured loans for the unemployed, helping them greatly in their battle to take control of their spiraling debts.

Certainly, when it comes to getting loan approval, meeting the set criteria and proving an ability to repay overrides any poor credit rating. The obvious factor that lenders look for is a reliable source of income, but an unemployed applicant is not able to supply such assurance. Yet, even with no job, approval is possible.

The idea behind these unsecured loans is to ensure that unemployed borrowers are given an extended period over which to repay the loan, much in the same way that students are excused from repayments until graduation. But there are other factors to consider.

The Advantages

The unemployed are rarely not interested in working, but are eager to return to employment to resume their lives. In the meantime, managing their debts is a priority, and a highly effect method is to secure loans to deal with immediate debts. So, unsecured loans for the unemployed is a choice option.

The size of the loan available as part of this scheme range from just $1,000 up to $25,000, with qualifying applicants being anyone who can meet the basic criteria but has not got an income to speak of. Meeting the criteria establishes their status as capable borrowers, so getting loan approval becomes possible.

Of course, no credit check is carried out since the employment status overrides the credit history of the applicant. There is also no need to provide collateral, so these unsecured loans are accessible even to those with few assets. And with repayment terms of up to 10 years, a lot of financial pressure is lifted.

The Disadvantages

The main disadvantage is that not all existing debts can be cleared or properly managed. A limit of $25,000 is a large sum, and can certainly make a difference, but more often than not unsecured loans for the unemployed need to be greater to fully deal with the debt. The mortgage, for example, is can hardly be dealt with.

Also, the lender is taking a big risk since there is no guarantee that the applicant will find another job. As a result, the interest charged on the loan is quite high, so that over the lifetime of the loan, a lot of interest is paid. Of course, getting loan approval with no job is a major positive so the compromise is acceptable.

The difference is clear, with a loan of $25,000 repaid over 5 years requiring monthly