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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.
Government
Schemes
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.
Last
Word
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.