Loan for the unemployed – loans for or despite unemployment

 

 

Loan for the unemployed is often the only way for many people with no fixed income to make expensive purchases. For banks, however, such unemployment loans are associated with a high level of risk because the monthly payments are not guaranteed.

Basic requirements for an installment loan

Basic requirements for an installment loan

In order to receive an installment loan from the bank, some important requirements are required. In addition to the age of majority, applicants must also always be able to demonstrate a fixed income that is obtained from employment. The reason for this is that, according to the banks, the monthly loan repayment is only given if the borrower has a fixed income from which he can pay both his living expenses and his credit installment. In the event of unemployment, proof of a fixed and regular income cannot be provided.

  • Personal loan – the chances of unemployment are much better through special credit marketplaces, where instead of banks finance a loan to private individuals.

The bank accounts

The bank accounts

Before a loan is granted, the banks prepare a household bill that shows both the monthly income and the expenditure. Although it is possible to set unemployment benefits on the income side, unfortunately this income is not sustainable. It is important to the banks, however, that the rate can be paid over the entire term of the loan. However, unemployment benefit is only a temporary benefit. Subsequently, those affected who have not yet found a new job receive only the basic security, i.e. Hartz IV. With this income, loan rates for the loan for the unemployed can then no longer be paid, and bankruptcy threatens.

How unemployment credit is still possible

How unemployment credit is still possible

Some banks do not fundamentally reject the unemployment loan, but do require collateral. Since real collateral such as houses or vehicles is difficult to sell, the banks are demanding co-borrowers who enter into the loan and who are currently repaying it. However, these co-borrowers must have a steady and sufficiently high income to be able to pay the monthly rate. To ensure this, the banks will also prepare a household bill for the co-borrower, also to avoid over-indebtedness.

Who can join as a co-borrower

Who can join as a co-borrower

Depending on the bank, not everyone can join as a borrower. Often only the parents or the children or partners are accepted as co-borrowers. Other banks, however, also accept good friends as co-borrowers. The only thing that is important is that they have adequate income to take out these loans.

Since each bank acts differently in this area, it makes sense to ask the institutions and clarify who can join as a borrower.

Possible risks and disadvantages

Possible risks and disadvantages

Since a loan for the unemployed poses high risks to the lending banks, these loans are often given at high interest rates. It is not uncommon for these interest rates to range from 10-15% pa, which is an additional burden. Due to these high interest rates, the credit rates are often comparatively high or a long term must be agreed, which then also has to bear high credit costs.

The risk of payment in installments should also be taken into account. In the case of unemployment, income is significantly lower than during employment, but many costs remain the same. In addition, income can drop significantly if only the basic security is transferred from the office after the period of unemployment benefit payment. With this monthly income there is hardly any financial scope to cover the credit rate. If the bank is forced to terminate the loan due to arrears, not only does a Credit Bureau entry follow, but often also personal bankruptcy.

Loan offers from the Internet

Loan offers from the Internet

There are always offers for unemployment credit on the Internet. Since such a loan is only provided by reputable banks with the appropriate collateral, as described above, such offers often have to be described as dubious. Dubious loan offers can be recognized, among other things, by the comparatively high interest rates (more than 15% pa) and the requirement to transfer the processing fee when the loan documents are submitted. In these cases, experience has shown that no loan processing takes place afterwards, so that loan seekers suffer a high level of financial damage, which makes their situation even more negative.

  • in addition: credit without Credit Bureau

How to recognize serious loan offers

How to recognize serious loan offers

Banks and credit intermediaries that offer reputable loan offers only charge the processing fee once the loan has been approved. It is therefore important to ensure that the lender makes a free offer and also accepts the documents without fees and carries out a preliminary check. It is common for the borrower to pay the processing fee only when the borrower holds the loan documents. It is often deducted from the requested loan amount even when it is paid out.

Conclusion

Conclusion

Loan for the unemployed is in a few cases a good way to get a loan despite unemployment. However, it should be clarified in advance which monthly charges can also be borne with unemployment benefit and how the repayment of the credit installment can be secured if no new employment can be found after payment of the unemployment benefit. Only from this point of view can it be avoided that an unemployment loan becomes a debt trap, which ultimately leads to insolvency proceedings.

Borrowing money without income

The interest rate is variable and is set individually. For an annuity loan of USD 100,000 with a maturity of 9 years, a nominal interest rate of 5.50% and an interest rate of USD 0, the effective interest rate will be 5.64%.

If you borrow USD 20,000 for 72 months, you will pay USD 627 / month (administration fee will be added: USD 19 / month at direct debit, otherwise USD 39 / month). In total you pay 38 707: – based on fixed interest 21.60%, effective interest 26.88% (2017-09-01), planning fee 595: – (added to the loan) and direct debit.

Is it possible to borrow money, completely without an income? This is a question that many people ask, and today we thought we would try to answer it. Taking a sms loan without an income is not something we recommend, but we still intend to explain how it works and if at all possible.

Can you take a sms loan without an income?

Can you take a sms loan without income?

Can You Really Get A Loan Without Income? The short answer to the question is yes, it is actually possible to get a loan completely without an income. Many sms lenders actually allow you to borrow money without an income. At least they have no official requirement that you must have an income, it is impossible to say how many without an income that actually gets their loan application granted.

Now that we’ve figured it out, are there any obvious problems with taking a sms loan without income?

Problems with sms without income?

There are many problems with borrowing without an income. The biggest, and quite obvious, problem is precisely that you do not have an income. You therefore have no way to repay the loan you have taken. It may not seem like a big problem at first but when the first bills come it will be a problem. You will quickly end up with debt collection and then with the Crown Magistrate, something you would prefer to avoid.

The next problem arises when the chancellor will demand you for the money for the loan. You then have no income that they can forfeit, this will lead to them starting to sell your property and other things that can pay off the loan. If you have nothing left to sell, the petitioner can bankrupt you, something that you absolutely want to avoid.

Thus, there are many problems with borrowing money without an income. What is the reason why some still do?

Why borrow without income?

Why borrow without income?

The biggest reason is that you do not have an income. In order to be able to pay bills and other necessities, the person then takes a sms loan and thus pushes problems forward in time. The problem is that the problems always catch up sooner or later. You won’t be able to push it forever.

What alternatives are there? The first thing you should do if you become unemployed is to register with the employment office. They can help you find a new job even if it’s only temporary. Then you get an income and can start getting back on your feet, without taking a sms loan without income. You can also sell some things yourself that you have at home to pay the bills until you find a job.

What are we trying to say with this article? We try to say that yes, you can take a sms loan without income and yes, you can borrow money without income. But that’s not a good idea. If you do not have an income you should at all costs avoid borrowing money, it will only create more problems, not solve the ones you already have.

If you are unemployed with a grant, are between work or have not paid employment, you will probably find it difficult to get a loan with normal conditions. However, you can still raise money by borrowing money without income.

In fact, most reputable banks and savings banks will simply deny you credit if you do not have regular paid employment.

Standard loans are available to those who can show that they are likely to be able to repay the debt according to schedule. The better your financial situation, the more attractive the terms of the loan will be – which means you will be offered the lender’s lowest interest rate.

The downside of this is that if you have a lower income you can get a higher interest rate. If you do not have regular income and a poor credit history, your application will almost certainly be denied.

In order to meet the demand for loans from unemployed persons, products from specialist lenders are offered, but the interest you pay on the amount you borrow here is significantly higher compared to ordinary personal loans.

This reflects the risk that the loan will not be repaid in full or on time.

If you need to borrow money without income

If you need to borrow money without income

Usually, you need a steady and ongoing salary to borrow from ordinary lenders, but there are more and more specialized loan providers for the unemployed.

So being without a stable job and income to borrow from major banks does not mean that you no longer have access to credit.

Improve your credit history

To get a loan, you need to be attractive to lenders, which often means improving your credit rating. Otherwise, you will have to fight to get a loan if you are both unemployed and have a bad credit history, because you are considered a high risk.

You can improve your credit rating in several ways:

  • Check that your information is really correct with credit reference agencies.
  • Add your name to the electoral register (contact your local authority to do so). This will be the first place lenders look for when checking your personal information.
  • Spread out applications for credit, in time. Every time you apply for a loan, you leave a “footprint” on your credit profile. If you are rejected multiple times in quick succession, it will make other lenders less likely to accept you.

Types of loans for loans without income

As someone with poor credit standing, you will not be able to apply for most loans, especially those with the most attractive terms. These are likely to be reserved for borrowers with clean credit histories who are employed.

Secured Loans: You can consider a secured loan, which means you have to set up property as collateral, like a house or a car. However, this security can be seized if you do not handle the refunds.

Personal loans with high interest rates: It must be noted that the greater risk you are perceived as by the lender, the more interest you will pay. It seems that people who need access to credit most face the highest interest rates from lenders.

However, keep in mind that it is always risky to take out a loan without income. Always weigh the pros and cons before taking the final proof.

Search for a loan without a processing fee

When a loan is taken out, various interest and fees apply. As long as the loan was not taken out from a dubious intermediary but directly from a reputable bank, these are all collected in the effective interest rate. This effective interest rate clearly shows the costs associated with the loan and is therefore ideally suited for a comparison when looking for a suitable loan offer.

Many consumers are of the opinion that banks can also take a processing fee when granting loans. To save them, they are specifically looking for a loan without a processing fee. This is not necessary at all. Because banks and savings banks may not charge a processing fee for the provision of consumer credit. Not since 2014, when the Federal Court of Justice issued a corresponding decision.

The search for a loan should therefore be the search for a loan without a processing fee, but always for a loan with low interest rates and good repayment conditions.

Are there still any processing fee credits?

Are there still any processing fee credits?

Even if a loan without a processing fee is required by law, there will of course still be some black sheep who charge this fee. These black sheep are less likely to be found at traditional banks. But there are plenty of them among credit intermediaries and so-called financial experts. You earn from the processing fee and are therefore very happy to collect it. Who pays the fee in the end and when always depends on the agent.

If he is serious, he only charges the fee after the loan has been arranged. In the best case, even directly from the bank to which he referred the borrower. If he works less seriously, the fee is often asked in advance. However, there is no guarantee of credit brokerage. As a prospect for a loan, despite the processing fee paid, you can end up without a credit despite everything. We therefore recommend never taking advantage of loan offers that require a processing fee to be paid in advance.

How do you take out a loan without a processing fee?

How do you take out a loan without a processing fee?

To take out a loan without a processing fee, you should always first get a precise overview of the various offers. These are so wide-ranging that the selection would be very difficult without a prior comparison.

It is worth using a comparison calculator for an overview or comparison. You can find it here on the Internet. The desired loan amount and the desired term are entered in the comparison calculator. Alternatively, the monthly installment can be used instead of the term to obtain credit proposals.

The loans offered are all without a processing fee as they come exclusively from banks. If a good offer was found, the bank behind it can be contacted and the application for a loan can be made.

Processing usually only takes a few days, so the money is quickly available. If you are in a particular hurry, you should make sure when choosing the right loan that it is an instant loan. Or else, the loan is taken out directly at a bank. There are no long waiting times and the money from the loan can sometimes be received directly after the application.

Avoid mistakes when repaying debt

If you pay your debts down, then you know it’s a difficult undertaking. And if you have a lot of debt to work through, it can also be a lengthy one, which is why it’s tempting to look for ways to speed up the process. Yet in doing so you encounter options that seem to be a link to dumping your debts, but in the end, they could cost you money and time.

As you make your way to debt freedom, beware of these four mistakes that you might set again:

 

1. Not with an emergency fund

1. Not with an emergency fund

In an attempt to put as much money on your debts as possible, you may be inclined to forego an emergency fund.

This decision could hurt you. An emergency of some kind – whether repairing or unexpected car medical expenses – is likely to occur while your debt is paying off. If you are not ready, you can end up in deeper debt. A bank rate survey found that 36 percent of Americans would either borrow from friends or family, take out a loan, or use credit cards to treat a $ 1,000 emergency.

Avoid this mistake by keeping a small cash cushion while you pay your debts down.

 

2. Taking out a home equity loan

2. Taking out a home equity loan

The temptation of taking a home equity loan or line of credit to pay off your consumer debt can be quite appealing – you can “wipe out” your credit card debt and other payments in one fell swoop, in exchange for a one-time payment at an interest rate. This can make your debt situation feel organized and less overwhelming.

But that can turn out to be a mistake on many levels. For starters, clear out your unsecured debt but increase what you owe to your secured debt. Should you have trouble paying your home equity loan, your home could be at risk.

 

In addition, one could increase what you pay in interest if you use the home equity loan to pay off medical and other bills that had zero interest, or a lower rate than the new loan.

Most importantly, it is a mistake because you are not actually reducing your debt – you are just moving it around. If you pay off your credit card debt and other payments without addressing what is causing you to go into debt, it is probably only a matter of time before you reboot those balances.

 

3. Borrowing from your 401 (k)

3. Borrowing from your 401 (k)

Another tempting debt solution is to borrow from the 401 (k). It goes without saying that doing this goes against the very reason you wore your 401 (k) in the first place: To take care of a secure financial future for yourself. Leaned on the unplugs of money from this goal and will bring you to miss on the benefits of compound interest.

Even if you will have to pay the loan back with interest, the interest comes from you so that there is no current reinforcement. Also, use the money the interest is subject to double taxation since you are paying the loan back with after-tax dollars and will be taxed again if you take distributions.

 

In addition, should you be fired from your job or resign, you will have to pay the loan back within a certain period of time, usually 60 to 90 days; otherwise, the loan balance becomes a taxable payout and will be subject to a 10 percent penalty if you are under the age of 59 1/2. This scenario will only worsen your debt situation.

 

4. Fall for fraud debt relief

4. Fall for fraud debt relief

Many companies tout their ability to reduce their debt. And the promises they can make like the answer you seem to be looking for.

But beware. While some reputable companies offer credit counseling and related services, there are several companies whose main purpose is to take your money. Others try to reduce your debts, but use questionable practices on how to keep your payments aside for several months so you can put where you are behind on your bills so your creditors are ready to negotiate. This can ultimately reduce the amount you pay on your bills, but may jeopardize your credit.

One way to detect a scam is to see if they ask you to pay: if a company requires payment in advance, you are likely to be scammed. Another red flag is when they promise a certain outcome, since no one can guarantee what concessions your creditors will be willing to make. Let conventional wisdom guide you here – if it sounds too good to be true, it is likely.

When you are overwhelmed with debt, it is understandable to want a quick or immediate solution. But keep in mind that you didn’t go into debt overnight, so it’s not likely that you’ll be able to get it out of it so quickly, either. If you want to make sure that you are out of debt for good, you can skip the links.