In June 2018, the national unemployment rate in the United States was at 4 percent. For government economists, this is an impressive feat. But for the 7 million-plus Americans who have the skills but remain unemployed, there is nothing to be happy about.
Being jobless not only denies you an opportunity to earn a wage but also makes it harder to access credit facilities.
Now, you have no job and need money to keep you going or even start a business. What do you do? The good news is you have options, primarily installment loans.
Keep reading to learn how to secure installment loans for unemployed people.
What Are Installment Loans?
An installment loan is a personal or business loan that is repaid in periodic — and usually equal — installments. The repayment period can be as short as two months or as long as 30 years or more.
Broadly speaking, the vast majority of loans, including mortgages, are installment loans. But when we narrow down to loans for unemployed or loans for people with bad credit, installment loans typically have very short term limits. There is also a limit to the maximum amount you can borrow
Let’s move on to how to get the loan.
Identify Potential Lenders
If you’re unemployed, there is little to no chance a commercial bank or credit card company will lend you any money. Without a verifiable means to pay back what you’ll owe, these institutions consider you a high-risk borrower.
As such, the first step to getting loans for the unemployed is to identify potential lenders. There are several online lenders who specialize in making loans to people like you, so your search should yield a sizeable list.
The problem is you’ll have a rough time picking out the best. If you decide to try your luck everywhere, you’ll waste your time and probably end up doing further damage to your credit score.
There is a remedy to this, though.
You can find online resources that focus on helping borrowers find favorable lenders with preferred rates. When you make an application through these websites, these experts will send it to various preferred lenders who will analyze it and give a decision.
Know Where Your Credit Stands – Just in Case
It’s not uncommon for unemployed people to have a bad or poor credit. Without a job and no other source of income, keeping up with bills and other financial obligations becomes a challenge. Loan accounts can quickly go into default, for instance.
Even though most providers of installment loans don’t do credit checks (or do soft credit checks), it’s still important to know your score.
Get a copy of your report and go through it. If your score is good, bingo! You can qualify for a larger installment loan. If your score is bad or poor, don’t lose any hope.
Check for any errors, and if you find one or two, get them fixed. And if there isn’t, at least you’ll narrow down your hunt to installment loans for bad credit.
Own an Asset? It Could Get You Loaned
All lenders have one thing in common: They want to lend money to people who will pay up — on time.
In the absence of regular pay, what else can you use to prove your ability to service the loan you’re requesting? A valuable asset is just as attractive to lenders as is a healthy paycheck.
If you own a condo in an upmarket area, for example, but don’t have a job, you can secure an installment loan against the property. The lender knows very well that if you don’t pay up, they will come for the condo, and ultimately sell it to recover their money.
Got a car? Some shiny diamonds and silver in your closet? Use them to get a secured installment loan.
Be careful, though, when dealing with secured loans. Read the fine print of the loan agreement before signing on the dotted line. Some lenders sneak in clauses that could put your asset at a greater risk of possession.
Get a Cosigner
In lending, a cosigner is a person who guarantees your loan, such that if you fail to pay, he or she pays on your behalf.
It’s not an ideal situation to put anyone in, but when push comes to shove, you must try all means.
Getting a cosigner shouldn’t be a problem if you have close relationships with people who understand your financial status. A parent, for instance, won’t mind vouching for you, as long you will put the money to good use.
If you have a reputation for mismanaging finances, however, not many people will want to be your cosigner.
Besides finding someone to be your cosigner, be sure they have good credit scores and verifiable sources of income. A cosigner who is barely scraping by will not do your approval chances any good.
Update Your Personal Details
Did you know incorrect details is one of the top reasons loans are rejected?
Yes, if you misspell your name or enter an incorrect physical address, expect your application to be rejected.
When looking for loans for the unemployed, ensure your details are accurate before submitting an application. Perhaps you moved and haven’t updated your new address. Get documents, such as utility bills, that can prove your new address.
Another thing to check is your bank account. With no job and possibly no money flowing in and out of your account, your bank can deactivate it temporarily. Ensure it’s active and able to receive money.
Take Advantage of Installment Loans for Unemployed People
Whether you’re unemployed by choice or not, one thing is clear: getting loans will get harder by the day. But it’s not an impossible mission.
Installment loans for unemployed people do exist, and we have shown you how you can take advantage.
What are you waiting for? Apply today and we can help you take that next step!