Authored by Kate Beswick in Loans
Published on 08-01-2009
Finding yourself without a job is a very worrisome time for anybody. Suddenly you are facing expenses with no plan of how to pay for them. And, if you don’t know how long you’ll be without work, that worry can turn into a real stress. Personal loans may seem like an ideal solution at this time because they can help you pay for expenses and have some money for emergencies. In the past, finding a personal loan while being unemployed was nearly impossible. But today lenders are beginning to realize more and more that providing personal loans to those who are unemployed can be a situation that can benefit everyone!
Personal loans for the unemployed work very much like other loans but they also differ in several ways. Just like other personal loans, loans for the unemployed may be secured or unsecured. Secured loans require collateral that can be offered should the loan be defaulted on. This means that when you apply for the loan you will use your home or your car as collateral. Should you be unable to make your payments, the lender would then be authorized to take your home or your car in exchange for the owing amount. If you don’t have any collateral that you can use, you can also apply for an unsecured personal loan, which requires only a payment plan.
The biggest concern that lenders have with giving unemployed individuals personal loans is that the borrower won’t be able to make payments back because they won’t have an income. Because of this, this is an area where unemployed personal loans differ vastly from other loans. Unemployed personal loans can have a fixed monthly payment amount just as other loans. Using fixed payments simply means that during the time you’ll be repaying the loan, you’ll have the same payment to make every month. This option usually works best for those who know that they will be returning back to work shortly. Flexible repayment options are also available for unemployed individuals. These repayment plans have different amounts every month but there are also other benefits to them as well. Flexible repayment plans also offer many other benefits as well including overdraft, holiday periods, and standby options.
Although lenders once shied away from providing personal loans to the unemployed, today they are becoming extremely popular. Unemployed loans offer many advantages over other types of loans as well. For secured loans, a person can borrow as much as 125 percent of their home’s value. Personal loans for the unemployed can also have a very long life, almost as long as 25 years in some cases! And one more huge benefit of personal loans for the unemployed is how easy they are to obtain! In just a few minutes you can go online, apply for a loan and find out if you have been approved. With the ease of application and the flexible repayment options, it’s nice to know that there’s such an easy answer when you’re faced with a bad financial situation.