How Unemployed Individuals Can Get Access to Credit
When a lender goes through a loan application, the borrower’s repaying capacity is one of the important factors linked to the approval. Monthly steady income is a guarantee that lenders expect from the borrowers for safe repayment.
With no employment, getting access to the credit could be quite challenging in the loan market. However, this does not mean you have no borrowing options. Here we have explored some of the options wherein unemployed individuals can get loans.
Loan Against Assets
Unemployed individuals can get a loan by pledging their assets. As you mortgage your property, the lenders may be flexible in terms of eligibility criteria and sanction the loan that you need.
Secured Credit Cards
Secured credit cards are easy way of accessing to credit for unemployed persons. If you have a fixed deposit, you can get a secured credit card. The credit limit is allotted against 70 to 80% value of the fixed deposit. A secured credit card helps build your credit history if you have no credit score which is an advantage even if you are unemployed. This credit card may give you the access to emergency funds, but it will stick with you for a long-term.
Get a Co-Applicant
When you have no income, you can seek a co-applicant to get a loan. It could be your friend or family members. The co-applicant can be the primary applicant whose income and credit history will be considered for the loan. In case of a home loan, the rules might vary for a co-applicant as the banks lay down certain conditions.
The government has introduced several schemes for the unemployed individuals to get funds for their short-term needs. For people who want to start their own business can also get a loan from the government with their business model.
The benefits of applying for government loans are the flexibility in repayment and low interest rate.
Peer to Peer Lending
This is one of the fastest way of getting instant cash in a click of a button. Peer to peer lending platforms collect your personal information of the borrowers and process the application. It is quicker, and you can get hold of the cash immediately after the approval. The rules are more flexible, and chances are higher in accessing the credit. The interest rates tend to be little more than the title banking system due to its convenience and ease of application.
Being unemployed is not a permanent situation, you can always get better opportunities in the future. Without losing any hope, you can use the methods mentioned above to get access to funds for your short-term needs.