Worried about not meeting job requirements to borrow? Learn about jobless loans.
If you are not employed in the traditional sense of the word and need financing, you may be wondering if a lender will consider a loan. This guide will explain how to borrow while you are unemployed, what you need to know and how you can apply for it. You can also see the ins and outs of the eligibility criteria of lenders offering this type of loan.
Can you get a loan if you are unemployed?
The short answer is yes, but you will need to earn some form of income or have appropriate remunerative assets to repay the loan. This may imply that you receive some kind of Centrelink payment, whether you are self-employed or receive a regular deposit in your account in the form of shares or something similar. And only some lenders will consider a loan.
Often, lenders will need to have access to your bank history and financial documents to verify that you can repay your loan.
Important things to consider before borrowing
- You must be able to repay the loan.
The main thing that lenders will take into account when you apply is whether you have the means to manage your repayments. If you only want to borrow a small amount and your income and expenses show that you can easily manage outstanding repayments, you may qualify. If you plan to borrow a large amount of money that will keep you from managing day-to-day, the lender will not be able to approve you.
- Other requirements will have to be fulfilled.
You may find it hard to get approved if you are paying off another short-term loan, and many lenders will not consider you a loan if you are bankrupt or if you have made a loan. under Part 9. Before applying, you will need to check the other eligibility criteria set by the lender. It is not because they have flexible criteria for your job that they will be flexible about everything.
- Do you receive Centrelink payments?
This is often what allows lenders to consider a loan when you are not employed. If you receive certain Centrelink allowances, such as a pension or parental payments, you may be able to use them as income (but only a certain percentage of your income). Some lenders may not accept certain payments, such as Newstart or Disability Support Pension (DSP). So be sure to check before applying.
What eligibility conditions do I need to fulfill for an unemployed loan?
The requirements differ depending on the lender with whom you want to apply and the amount you want to borrow. You will need to check the specific criteria before submitting an application, but you can apply one of the following options:
- Earn a specific income. Even if you do not need to be employed, you may need to earn a regular income to apply. This is a common criterion that you will find in personal loans. Therefore, if you do not have a job or are employed on a casual basis but you earn enough income, you may still be eligible to apply.
- Receive Centrelink payments. Some lenders will accept Centrelink payments as a form of income, but, as noted above, they will have guidelines. The conditions may be that no more than 50% of your income comes from Centrelink payments or you do not receive Newstart Allowance or DSP. Check the details before applying.
- Your credit rating. Flexible employment criteria are often accompanied by flexible credit criteria. In other words, if a lender is willing to look beyond your lack of employment, he is often able to look beyond the negative marks of your credit report. Keep in mind, however, that this flexibility has limitations. For example, you may have a default or two and still be accepted, but many lenders will not consider you if you are currently bankrupt.
- Your assets. If you own a car or boat or have rights in a property, your application may be more likely to be approved. Indeed, the lender can use this as collateral for the loan.
Where can I get a loan if I am unemployed?
There are different loan options for unemployed people, between jobs and benefit recipients.
Sarah needs a loan
Sarah has been unemployed for three months after graduating and is currently receiving Centrelink payments. She can get a job as a sales representative, the problem is that she needs a car to be able to offer her the role. She found a cheap car from a friend (1,500 euros). All she has to do is get a loan.
She will be able to easily repay the total amount using her Centrelink payments and, when she is paid for the first time in her new job, loan repayments will be even easier to manage. She has a credit card debt and StepUP has refused her a loan and the interest-free loan program can not help her buy a car. She has considered a Centrelink cash advance, but Centrelink can not provide it in time to secure the position.
She compares her small short-term loan options and finds that some lenders will view her Centrelink payments as income. After comparing availabilities and checking the eligibility criteria, she submits an online application and approves the loan amount. His repayments are structured around his Centrelink payments and, after the purchase of the car, the role is offered to him.
Are there other loan options?
It’s not just short-term lenders to consider if you need financing while you are unemployed. It is important to consider all of your options and find the one that best suits your needs and circumstances.
- Interest-free loan scheme (NIL). Provided by Good Shepherd Microfinance, the Interest-Free Loan (NIL) program provides credit to low-income individuals and families who hold a health card or a pension card. Loans of between 300 and 1,500 euros are granted at no cost, no charge and no interest to help people pay for household items, medical and dental services and even essential elements of education. Applicants must demonstrate a firm willingness to repay the loan and have resided at their current address for more than three months.
- StepUP loan. Another option offered by Good Shepherd Microfinance, this time in partnership with NAB, this loan is available between 800 and 3,000 USD at a very low rate. To be eligible, you must hold a valid Centrelink franchise card or Part A tax benefits for families. As with NILS, you must be at your current address for more than three months. This loan can be used for household items and medical or dental expenses, as well as to buy a car, a computer or to perform repairs on your home or car.
- Joint requests, guarantors and co-signers. If you are unemployed and in need of a loan, you may consider applying to another person – a partner, family member or friend – to increase your eligibility. Many lenders offer the option for joint applications, and some brands such as Buddy Money encourage you to apply to a guarantor for you to access financing. So, if you do not meet the eligibility criteria, find out if you can apply to someone who does. Remember that this is a great responsibility that the guarantor or co-signer assumes as he shares the responsibility for repaying the loan.
Thus, you do not reach the end of the funding path when you are unemployed. If you are able to manage your repayments, there are lenders who consider you as loan options. Do not forget to compare all the options available to you to find the one that best suits your needs.