Making yourself attractive to lenders
Obtaining a loan when you're unemployed can be a daunting prospect but you do have options and there are still deals to be had. The key is to make yourself as financially attractive as possible to lenders. To point you in the right direction here's our top tips for unemployed loan applicants:
1: Do you really need the loan?
If you're unemployed, it is likely that you have to think about your incomings and outgoings on a regular basis. Is the need for extra finances vital or is it for something that maybe isn't necessary?
2: Compare your options
Because you are unemployed, you are effectively classed as a higher risk and as such interest rates may be a lot higher. However, this may be a small price to pay if you are in desperate need of the loan. However, you should still do your homework and shop around to find the best interest rates and always ensure that you can meet the repayments.
3: If you're struggling, ask for help
If you are struggling to keep up with important bills then borrowing more is not the answer. If financial matters are a concern, please reach out to someone who can help.
4: Don't make multiple applications in a short space of time
A lot of credit searches within a short space of time will have a negative impact on your credit file. Use our Eligibility Checker tool to find the best loan for your specific circumstances and get it right first time. Compare:
5: Lender's acceptance criteria
Make sure you meet the lender's criteria before you apply. If not you will be declined. Read more:
6: Check your credit file
7: Register on the electoral roll
Ensure you are on the electoral register at your current address. This is a relatively simple process and indicates some degree of stability to potential lenders.
8: Guarantor loans
If you have a suitable guarantor, it's may be worth considering a guarantor loan.You may be able to obtain a slightly better interest rate by going down this route. Do beware guarantor loans are for a very specific set of circumstances. If you fail to meet your repayments you will need to consider this carefully before taking out this type of loan.
Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.