In today’s economy, anybody can be without a job at any point in time. It doesn’t matter how the position you work at or at which company, you can be easily replaced. Especially after the coronavirus pandemic, things have gotten really bad. When suddenly you are out of a job, but you need to pay the bills, what do you do? If you dive into your savings, they will expire soon, and you will be left with nothing. This is where loans come in. But then again, there is another question. How will you get a loan if you are unemployed? Because in almost all loan cases, employment is a mandatory factor. This is exactly what we are going to discuss today. Yes, it is possible to get loans even when you are unemployed. So let us dive deep into how you can get a fast personal loan while being unemployed.
Risks of loans while being unemployed
Before we get into the how-to, let us first understand the risks which unemployed loans bring. If you are okay with the risks, you can easily apply for the various loan procedures.
- Missing Payments: Since you’re not earning more often than not, it can happen that you do not have the money to pay your monthly installments. Now, if you miss paying your monthly installments, two things will happen. Your credit history will be affected badly, and since you missed your payment, a late fine will be levied, and you will end up paying much more than what you would have. So it is always advisable to keep 2-3 months’ installment somewhere you won’t ever touch. And after you pay every month’s installment, you add another month’s installment money to that kitty.
- Higher interest rates: The problem with unemployed loans is that, since the bank is making a sacrifice for you, they will make sure they get something in return for that sacrifice. So they will levy very high-interest rates than they would have if you were employed. So you will need to pay a much higher installment than a normal loan situation.
- Shorter repayment term: The problem with an unemployed loan is that the lender sees that you are unemployed, and he or she is unlikely to believe that it is going to change in the coming months. To recover their money quickly and safely, the bank will make sure that you get a shorter repayment period. Hence you will be asked to repay the money as soon as possible.
Apart from these, there are not many problems for an unemployed loan. So now, let us understand how you can get an unemployed loan.
Alternative ways to get loans when you are unemployed
Your lender is lending you money; all they care about is how they are getting it back. Hence indirectly, your employment and current financial condition matter to them. But if you are unemployed, there are also ways to get a loan that doesn’t concern you. Let us see how:
- Spouse: If you are married and you need a loan, but you are unemployed, your spouse’s income can be used to repay the loan. For this, you need to add your spouse as a co-applicant. Then if the bank allows, your loan will be approved. Then again, your spouse’s income must be high enough that a loan is possible.
- Investments: If you have multiple investments like homes which you give for rent or shops which you give for rent and the money from them can be used to pay back the loan if your lender approves. It will not be allowed that you pay back the loan in one full payment, but if you have a monthly income source from your investments, you can be allowed to take a loan, although it depends on your lender.
- Retirement benefits: There are many jobs, especially government jobs that give money after their employee has retired. If this is the case with you, you can easily get a loan approved from licensed money lenders Singapore; because you are not technically unemployed, you still have an income source, which is like a fixed monthly salary.
- Other forms of payment: Apart from retirement benefits or investment money, if there is any other income source that you get every month; you can use that money to get a loan approved. For example, alimony payments, child support money, and so on. If you get a substantial amount of money from a fixed source, your lender might take that into account and get you a loan.
Alternative to loans
If you are in urgent need of money, it is not always necessary to take a loan.
- Credit Cards: If you own a credit card, you can easily use that to buy something you do not want to, or you cannot pay at the moment. The only problem with this method is that credit cards come with very high-interest rates, so if you are not careful, you might pay a lot. Especially since you are unemployed, you must not miss your credit card repayment date.
- Collateral loan: You can always use your property or gold as collateral to get a loan off of. Gold loan is a very famous way of getting loans, and the process is similar for properties as well. You give a property or your goal to the bank as security and take a loan based on the value of the item you gave to the bank. In case you are unable to pay back the bank, whichever item you gave to the bank as the bank will take security as collateral for the loan.
Nothing is impossible in today’s advanced time and age; hence, in that line of thought, getting a loan for unemployed people is also not impossible. You just need to be very careful when applying for the loan and pay it back well before your required date to avoid late fines. That is all!