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Potentially, yes. Some lenders will consider you for a loan when you’re not currently employed, but you’ll need to be able to show that the loan you’re applying for would be affordable. You may be earning some form of income or have suitable income-earning assets to repay the loan. This could mean receiving welfare payments, being self-employed or receiving a regular deposit into your account from investments.
Many lenders will require access to your banking history or financial documents in order to verify that you’ll be able to repay your loan. Lenders may be more willing to consider your application if you can apply with a guarantor – that’s a friend or relative (typically with good credit) who promises to step in if you miss a repayment.
The requirements differ depending on the lender and how much you’re looking to borrow. You’ll need to check the specific criteria before submitting an application, but any of the following might apply:
Sarah has been out of work for three months after completing her degree and currently receives benefits. She can get a job as a sales rep, but the trouble is she’ll need a car to make it to work every day.
She has found a cheap car to purchase from a friend for £1,500. All she needs is a quick cash loan, which she’ll be able to comfortably repay using her benefits, and when she gets paid from her new job, the loan repayments will be even easier to manage.
Sarah compares her loan options and sees that there are lenders who will consider her application if she applies with a guarantor. After comparing what’s available and double-checking the eligibility criteria, she submits an online application and is approved for the loan amount of £1,500.
If you’re unemployed and in need of a loan, you might consider applying with another person–a partner, relative or friend–in order to boost your eligibility. Many lenders offer the option for joint applications, and some lenders even encourage you to apply with a guarantor in order for you to be eligible for a larger loan amount.
If you don’t meet the eligibility criteria, find out if you can apply with someone who does. However, this is a large responsibility the guarantor or co-signer is taking on because they’re sharing the responsibility for you repaying the loan.
If you’re unable to get a personal loan because you have no job, you may still be eligible for a short-term or payday loan. These are generally small loans that are approved quickly, and are available to those who are unemployed or have no income.
However, while you may be tempted to apply for a short-term loan, it’s important to understand that they are the most expensive type of finance, and should only be considered as a last resort, or in an emergency. Taking out a payday loan when you’re unemployed can quickly lead to financial difficulty if you can’t manage to make your repayments.
Unfortunately, your chances of being approved for a personal loan if you have no job and poor credit are very small. When considering whether to give you a loan, lenders evaluate how likely you are to repay the loan, and having no income and a history of struggling with debt will mean you represent too much risk for most lenders.
Most lenders will perform some form of search on your credit when you apply for a personal loan, so you’re also unlikely to find a personal loan with no credit check, especially if you’re unemployed.
You haven’t reached the end of the financing road just because you’re unemployed. If you’re able to manage your repayments with another form of income, there are lenders who will consider you.
Remember to compare all available options to get the best loan for your needs.
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