Being unemployed is difficult for your finances, so it’s important to manage your money carefully to make sure you can cover all your usual expenses. However, whatever your planning, unexpected expenses may occur, which means you need a little extra money.
It can be harder to get a cash loan if you are unemployed, but it is possible.
If you can not provide proof of income, lenders are less likely to offer you a cash loan. However, even if you do not have a job, you have a choice of options, provided you have another source of income.
The best terms and rates are often reserved for clients with a good credit history and those who are employed. Usually the big banks refuse to offer loans to people without a fixed salary because they are more likely to be late or to miss payments, but you can still access cash through local lenders, payday or short-term. However, loans from these types of lenders tend to be more expensive and may not be suitable if you have to borrow more than £ 1,000.
Get a cash loan if you are unemployed
If you decide to apply for a loan from an on-site lender or a short-term lender online, you may be asked to perform an affordability assessment to determine if you will be able to repay the money you asked to borrow.
As part of this assessment, you may be required to provide proof of income. This could include:
- Payments from an employer
- Independent income
- Other sources of income such as regular payments you may receive from your partner or ex-partner.
However, each lender is different, so you will need to check.
Why a cash loan could be refused
Even if you can show that you can afford a cash loan, there may be other reasons why you are refused
- Bad credit
- If you have already missed payments for a credit, have been declared bankrupt or issued with a county court judgment (CCJ), you may have trouble obtaining credit from some lenders, but your application will not be automatically rejected.
- Several credit applications
It is important not to solicit credit from many lenders in a short time. Each application can leave an “imprint” on your credit report, which can be a concern for lenders. Try to keep an app every six months if you can.
How to improve your chances of being accepted for a loan
If you are unemployed and want to improve your chances of being accepted for a cash loan, you can follow these steps:
Build a good credit history
A lender will feel uncertain offering you money if you have a low credit history or a poor credit history. If you are accepted, be sure to repay your loans or credit cards on time and in full, without missing a payment. This will show lenders that you are able to manage your money and could help you access credit again in the future.
Register to vote
To build or improve your credit score, start by putting your name on the electoral roll. This will help the lenders to check if you are what you are saying.
Learn more about what could help improve your credit score.