Losing a job and becoming unemployed is one of the most stressful and trying times of any person’s life. Without a stable source of income, bills can quickly become overwhelming since the small help afforded by unemployment insurance is generally not enough to meet your needs, especially if you have other people to support. Therefore, using a loan to cover these bills seems like a really great option. However, there are few lenders willing to work with unemployed borrowers and those who do cannot generally provide relief quickly.
Getting a Loan While Unemployed
At first, the prospect of getting a loan without a job seems ridiculous, but it is really not as hard as you might think. There are loans available for people without jobs and, if you take the right steps, you can have the money in your bank account quickly. The important step you need to take is to understand your options and where you stand with different lenders. This article will break down these elements for you so that you can decide on your next move.
Two Types of Loans
Any time you want to borrow money quickly, you have two options: secured loans and unsecured loans. The first option, secured loans, represents the best choice for the unemployed. Secured loans are generally taken out using some sort of real property as collateral against the money you will borrow. Generally, this is done either through your home or a later model car or truck. By leveraging the value of your property against the loan, your unemployed status is less important. This is because your property provides insurance to the lender; if you cannot repay your loan, he will simply repossess your house or car.
An unsecured loan, on the other hand, does not require collateral. Instead, an unsecured loan is given based on the word and the signature of the borrower. Being unemployed will have a greater impact on your ability to borrow money however since the lender has no guarantee of repayment. Unsecured loans are therefore generally given to the unemployed in small amounts with large interest rates and short terms. Obviously, if you are unemployed and own a home or a car, your best bet is to go with a secured loan.
Two Types of Lenders
In addition to the type of loan you choose, you also need to be careful with the type of lender that you use to get your money. Traditional lending institutions like your personal bank or local credit union generally refuse to loan money to the unemployed. The risk of default is too great for these lenders who have many different financial dealings besides personal loans.
The other option is to look online for the money you need. There are several online private lenders who actually specialize in providing quick loans for all types of so-called risky borrowers. These lenders only deal in personal loans and will therefore be able to help you obtain a loan quickly despite the risk presented by your unemployed status.
Online Applications Are Fast and Easy
The final piece of the puzzle is actually filling out the application for your loan. Applications from online lenders are available on the computer and can be completed from the comfort of your own home. You will be able to talk to several different lenders about your particular situation and find the one best suited to dealing with your status as unemployed.
Loans are definitely a great option when your income is halted by unemployment. However, in order to get the money you need quickly, there are certain choices to make in terms of the type of loan and the type of lender you will use. Following this advice will have you on track to getting the money you need quickly.