A personal loan for the unemployed is a great way to get money when needed. However, personal loan on unemployment do have their limitations, and you must understand them before applying for one.
Content Summary
Loan amount
When it comes to getting personal loans on unemployment, there are certain limits that you need to consider. The loan amount you can get also depends on the duration of the loan. If you are looking for a short-term loan, then your chances of getting approved will be higher as compared to those who want long-term loans. In this case, “You might be approved for less than you asked for,” as Lantern by SoFi experts say.
The other factors that affect the amount you can borrow are your credit history and score. If you have a bad credit history and a low score, then it will be difficult for banks and lenders to approve your applications easily. However, suppose they know they have no way out and need funds to survive or pay off medical bills etc. In that case, they might consider giving out some extra money as well but only after putting down collateral or a guarantor.
Rate of interest
Now that you know the basic information about personal loans for the unemployed, it is time to talk about another important factor: the interest rate. Many people look at this as their top priority when they are thinking of taking a loan.
The interest rate depends on several factors, such as the lender, your credit score and many more. The lower the interest rate, the better it is for you because it allows you to save money in terms of payment costs and the repayment period. So keep this in mind while applying for any personal loan without job or income proof.
Tenure
The tenure of a personal loan is the duration for which the loan is taken. Typically, personal loans have a tenure between 12 to 60 months, and the rate of interest depends on the tenure of the loan. The longer your repayment period, the lower your monthly installment will be, but you’ll need to pay more interest over time.
Documents
The documents you’ll need to present include proof of income, proof of residence and a bank statement. If you have been employed, it is required that you provide a certificate of employment or a letter from the employer. Those who are self-employed will also be required to present their tax return for the most recent year.
Credit history
If you want to get a personal loan, your credit history is an essential factor. Your credit history is a record of your past borrowing and repayment activity. A good credit history can help you get a lower interest rate when applying for a loan.
If you have a bad credit history, getting approved for the loan may be difficult, even if you can borrow money from the lender based on their criteria. In addition, some lenders require that applicants have at least three years of financial information on file before deciding whether they will approve them for their personal loans and other financial services offered by that company.
Getting a personal loan for the unemployed can be a daunting task. The process is not easy and the conditions are stringent. However, it is possible to get a loan when you are unemployed and have a bad credit history. It all depends on your eligibility, willingness to pay back the borrowed amount, other factors such as employment status, etc.
