Everything you Need to know about Loans for the Unemployed

Would you like to take out a loan despite being unemployed? Above all, you often need a loan exactly when you have just lost your job. The bills and living expenses have to be paid even if you suddenly no longer have employment. Weeks or even months can pass before unemployment benefits are paid out, during which it is difficult to get by without an income. In such cases, a loan for the unemployed can help. However, if you are unemployed, you usually have a bad chance of getting a loan from an ordinary bank.

Loan for the unemployed

You are probably wondering: How does a loan for the unemployed work? In fact, very few lenders offer loans for the unemployed. That’s because the bank needs security that the borrower can pay back the loan. Without a job, you can often not prove to have an income. Even those who have an income, for example through unemployment benefits, often do not have enough money to pay back the loan, including interest. Therefore, most banks do not lend to the unemployed.

According to Moni365, you have a good chance of getting a loan from providers who specialize in loans online. These specialized loan providers often give you credit despite bad credit score – meaning that you can get an unemployment loan even if you have a low credit rating.

You can also take out a loan from a small loan provider. This is particularly useful when you just need to pass trough a brief financial emergency. If you are unemployed, it is often not easy to pay an unexpected bill, for example if the washing machine or the car suddenly breaks down. Even if you only have to survive a few weeks until your unemployment benefit arrives, a short-term loan is ideal for this.

How to find the right unemployment loan

In principle, it is also possible for the unemployed to get a loan even if many traditional banks do not give loans to the unemployed. You have four different ways to get your unemployment loan.

These options are:

  • Apply for a loan from traditional banks;
  • Getting a loan for the unemployed from the Federal Employment Agency;
  • Apply for a short-term loan online without any income requirements;
  • Get a loan for the unemployed online from a special provider;

Loan for the unemployed – what’s behind it?

As an unemployed borrower, getting a loan from a traditional bank is difficult, but not impossible. The best chance of a loan despite unemployment is to have a second borrower as a co-applicant indicated. Alternatively, you can also provide a guarantor who will be responsible for repaying the loan if you cannot repay the loan yourself. This procedure serves the banks as security and increases your chances of getting an unemployment loan.

However, it is of no use if you apply with an unemployed guarantor or an unemployed co-applicant. The bank needs at least one liquid, i.e. solvent, the borrower to finance an unemployment loan. For you, this means that your surety or co-applicant must have a good credit rating. In the ideal case, the second borrower also has positive credit information with the highest possible credit score. Furthermore, one of the two borrowers must have a regular income.

As security for the banks, the lender often requires that at least one borrower has a regular income, as this can be attached in the event of a complete default. In any case, at least one of you must provide proof of income. This does not mean that you need to submit income from an employment relationship. Proof of income about your receipt of unemployment benefit would be sufficient as collateral for the banks if your second co-applicant or surety can prove a regular income from an employment relationship. To learn more visit here.

A loan from the employment office

Alternatively, under certain conditions, you also have the option of obtaining an unemployment loan from the employment office. However, lending by the employment agency depends on the urgency of your personal situation. If you are registered as unemployed, you are entitled to an unemployment loan, for example, if you can no longer pay basic bills yourself. For example, if you can no longer pay the rental costs or heating costs for your apartment. You can also get an unemployment loan if your home needs repairs.

If you want to reorient yourself professionally in order to get out of unemployment, you can, under certain conditions, receive a type of loan for this. For example, you can apply for an education loan at the employment office to finance an apprenticeship or study in order to pursue a regular job in the future.

In any case, your personal situation will be checked before financing to determine whether you meet the requirements for an unemployment loan from an Employment Agency. However, it must also be mentioned here that the Federal Agency only grants unemployment loans for the urgently needed and intended purpose. So this means that it is not a loan for consumption or for free use.

If you get a loan from the Employment Agency despite being unemployed, you will receive your loan on best terms possible. Since this is a government-sponsored loan, there is no interest in return for the banks. Another advantage is that the monthly loan installment is adjusted to your monthly income, so you don’t have to worry about not being able to pay off the unemployment loan.

Are you interested in an unemployment loan from the Federal Agency? Then make an appointment with your clerk to discuss everything else and apply for your unemployment loan.

Can I take out a loan if I am unemployed?

Loans for the unemployed are generally difficult to come by. However, you can also find loan providers who can offer you a loan despite unemployment under certain conditions. However, you have to meet certain requirements. On the one hand, you must be of legal age in any case, i.e. you must be at least 18 years old. Second, all reputable providers require a registered place of residence in the country you’re borrowing in. Third, you usually need someone to vouch for you. As an alternative, many banks and lenders also use a co-applicant. Fourth, the person who vouches for you must provide proof of income.

Compare different providers on the Internet, because they all have different offers with different terms in terms of term and interest. But be careful with hidden costs. Unfortunately, there are many dubious lenders on the Internet who only cause you unnecessary costs instead of giving you a fair loan for the unemployed. These fraudsters often try to sell you expensive insurance, such as residual debt insurance or life insurance instead of an actual unemployment loan.

Before you apply for a loan or even take a loan from any provider, please inform yourself comprehensively on the Internet about the lender and the applicable conditions. You can find a variety of reviews and conclusions about lenders on the internet. This allows you to take a fair and reputable loan, even if you need a loan as an unemployed person. It is best to orientate yourself on the serious options that we have presented to you to find a serious unemployment loan.

How can I get a loan without an income?

If you have no income yourself, it is not easy to get a loan financed. Because the banks and online providers do not grant loans without collateral. A regular income is often a prerequisite for receiving a loan. This, of course, makes it difficult for the unemployed to get credit. If you have no income whatsoever, i.e. no income from maintenance, child support, rentals, etc., it is not advisable to apply for a loan. Because even a loan for the unemployed must be paid back regularly and in full amount. If you receive unemployment benefit, think carefully and calculate whether you can afford the loan. You should be financially able to repay the monthly installments including interest and have enough money left over to finance your living expenses including rent, bills and groceries.

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