If people suddenly find themselves unemployed, this often threatens to endanger the financial and personal economic situation. Unemployment benefits provide a livelihood, but it is usually not enough to maintain living standards, deny financial obligations or implement personal goals. The unemployed very often have the problem of repaying existing bills and loan installments, paying insurance premiums or being unable to afford expenses for essential matters. The unemployed are also looking for suitable financial means and ways to start a new business.
Requirements for a loan for the unemployed:
If an income is no longer available, lenders decide on the approval of a loan on the basis of other collateral such as creditworthiness, assets, guarantees or stable concepts for setting up a business. The creditworthiness (creditworthiness) is determined by the economic repayment ability and willingness to pay. Your measure is evaluated based on criteria such as Credit Bureau information, income level, amount of expenditure, available assets and the respective debt situation.
If assets such as home, insurance, securities, attachable possessions or valuables such as gold jewelry, i.e. assets that can be converted into liquid assets, increase the likelihood of unemployed people getting a loan. Guarantees from solvent family members are also very often accepted. A prerequisite for the promotion of the tax authorities for the establishment of a company is an implementable, steadfast and convincing concept.
Possibilities and providers of a loan for the unemployed:
There are several ways for unemployed people to get a loan, even if their own bank refused to do so. Especially on the Internet, credit intermediaries and credit exchanges explicitly offer unemployed people various loans. It should be noted that credit intermediaries do not grant credit themselves, but rather forward credit inquiries to several banks and submit the most advantageous offers to the potential borrower. On the platform of a credit exchange, loan seekers can specify their desired loan amount including interest rate and realistic term, which investors can respond to.
A distinction is made between two models. Credit exchanges can act as trustees between investors and borrowers, or lenders and borrowers can communicate directly through the credit exchange. If the relevant conditions are met, such as debt transparency, certain unemployment benefits or job opportunities, unemployed people will also find offers from private and foreign credit providers on the Internet. Here investors often do not require a credit check or Credit Bureau information. If there is no suitable way to get the loan for the unemployed outside, there may be the possibility to borrow money among relatives (relatives loan).
If people are looking for financial means to start their own business from unemployment, the state offers funding opportunities such as the start-up grant or the entry fee. Loans for the unemployed are usually charged high interest rates, which are far above the conditions of an average loan application. The reason lies in the high risk of default of the repayment options. Depending on the individual situation, providers of unemployment loans sometimes provide loan amounts of up to USD 250,000.
Alternatives to a loan for the unemployed:
If additional loans plunge unemployed people into even greater insolvency, but there is an urgent need for financial means, alternatives are available. If the unemployed are looking for a suitable debt rescheduling loan, credit intermediaries offer the unemployed a debt restructuring instead of a loan. Existing loans and due bills are repaid through credit intermediaries who are negotiating with creditors, lawyers, debt collection agencies, and courts.
Instead, the debtor continuously pays a rate to the credit intermediary. The new debt and the future installments are usually lower than the total amount of previous loans, outstanding bills and the associated costs. Another way to get liquid funds is, for example, the termination and sale of existing capital pension or life insurance. By taking out a rental deposit insurance (guarantee certificate from the insurance company), the rental deposit already paid (usually 3 months’ rent) can be paid out.