Most people think that only those that have a regular job can borrow money from lending companies. However, there are lending institutions that cater to borrowers that are unemployed but who receive monthly benefits from the government. Besides, lenders would also evaluate the situation of the borrower. Some people that apply for a short term loan have other sources of income that would allow them to make monthly payments for their mortgage.
Here are the unemployed people in the UK who can qualify for any short term loan.
Allowance for People Looking for a Job
People who are actively looking for a job and are capable of working may enjoy this type of benefit and qualify for a short term loan if they have a financial emergency. The profit comes every month until such time that the person is employed. Hence, even if they are still looking for a job, these people can qualify for a short term loan.
Employment and Support Allowance
Citizens of the UK whose capability to work is limited because of a physical defect or illness receive a regular allowance from the government. The benefit arrives monthly. Lending companies are willing to extend credit because the compensation they receive is also a form of income. These government beneficiaries may apply for a payday loan or other types of short term credits.
Income support is a financial benefit given to a pregnant woman or a solo parent of a child that is five years old or below. A person that provides care for the elderly or homeless children or orphans also receives income support in the UK.
Things that Lenders Require for Loan Approval of Unemployed Applicants
People who do not have a stable job and rely solely on their benefits must show that they are receiving a regular income that includes the benefits that they collect from the government. If the benefits arrive regularly, lenders would feel confident that you can pay back your loan. Lending companies would have an idea of how much money to lend if they know the number of your monthly benefits.
Lenders would also want to see a borrower’s credit history through which they could see if you have been paying your loans and other debts diligently. An excellent credit history would help you get a quick loan. To clear all records of your debts, pay first a pending loan before you apply for a short term loan for the unemployed.
Make sure to check your credit score. Some agencies give ratings to creditors according to their reliability and capability to pay back a loan. However, if your score is low, you might still get a loan since lending institutions would also consider your source of income. In many instances, even people with a meagre credit score can always borrow money from particular lending institutions.
Fortunately, some lending companies do not ask you to have a guarantor, even if you are unemployed. As long as your unemployment benefits come on time, you could quickly get a loan. You do not have to offer collateral as well. Indeed, short term loans are the easiest to understand, even if you are not working and receiving a salary.
People who are unemployed or living on benefits are prone to become victims of loan sharks because they find it hard to borrow money from formal lending institutions. To save creditors from illegal lenders that charge an exorbitant interest rate, speciality lenders are now open for unemployed borrowers or those depending on their government benefits.
Most of these lending firms accept an online application and process them fast that clients can get their funds a few hours after applying.