If you do not have a job then you might think that there are no loan options available to you. However, you may find that there are some loans which you can still take out. Traditional lenders will probably not be interested in lending you any money, but you could find that you will be able to get some loans from other lenders such as from those who offer guarantor loans. They will decide on who to lend to using different conditions than other lenders and therefore it is something which you should look into more.
How do the Lenders Judge You?
It is good to understand how guarantor loans work. The lender will not look at your credit record, but they will ask that you nominate a guarantor who will have a good credit record. The guarantor will need to cover any repayments that you will not be able to pay. This means that they do not mind if they are taking on a high risk by lending you money as they have a guarantor to make the payments for you. This will mean that you will be able to take this loan on regardless of your credit record. The lenders will check a few of your details though. They will want to check that you live in the UK, have a UK bank account and are over the age of 18. They may also want to see that you have a regular income.
Will This Loan Work for You?
This loan can work for a lot of people but you will need to check that it is right for you and your personal borrowing needs.
- You will need to make sure that you can find a guarantor. It is no good applying until you have found someone who is willing to be your guarantor. You will need someone that has a good credit report and is willing to help you out like this and so it may not be easy to be able to find the right person. You will need them on board before you can sign up.
- These loans tend to be for between £1,000 and £10,000 so they will only be of use to you if the amount of money that you need to borrow fits between these amounts. If you need more, then you may just have to wait before you get a loan. If you need less, then you might find that a payday loan might be better for them as these lend up to £1,000. The payday loans do need a repayment in one instalment though and this might be a bit tricky if you are unemployed so an instalment loan could be better as there are several payments to make it easier to manage.
- You need to make sure that you are aware of how much you are going to have to repay and that you will be able to afford to repay it. It is a good idea to have a close look at your bank statements to see whether you are likely to be able to afford the repayments. Just because you have a guarantor who can pay it for you, you do not want to have to rely on them to do this. It can be much better if you pay it for yourself. Obviously, if you do not have a job, then this could be difficult, but you may be able to manage this out of your benefits. You may also be able to find ways to generate a bit more money if you need it, perhaps by doing some temping or freelance work, some online work, selling things you own and no longer need or things like this. It is good to investigate your options.