Can you get approved for a loan with no employment?

Finance

In many cases, you cannot get a loan if you are not employed, since this is a vital thing that lenders look for in order to recover the money they lend out. 

However, there are different circumstances that lenders might consider, especially for those who are retired, freelancers or in between jobs.

According to recent statistics from the U.S. Bureau of Labor Statistics, as of December 2023, the unemployment rate is around 3.9%, but there are a number of people in between jobs or working in the gig economy who may still be eligible for a loan.

In this article, we explore the possibilities and challenges of obtaining a loan without a conventional job.

Understanding the Basics of Loan Approval

Traditional lenders such as those offering personal loans or credit cards typically evaluate an applicant’s credit score, income stability, debt-to-income ratio and employment history to determine their eligibility. 

Employment serves as a key indicator of an individual’s ability to repay a loan, providing lenders with assurance regarding financial stability.

Without employment or a stable income, people may have to resort to unpleasant forms of borrowing, such as those from loan sharks or predatory lenders, selling valuable items they own through pawnbrokers or other specific loans for bad credit, which often carry high interest rates.

Do Lenders Consider Alternative Income Sources?

Yes, while conventional employment may not be a prerequisite for loan approval, alternative income sources can bolster your chances of securing financing. 

Freelancers, gig workers and independent contractors often generate income through diverse channels, such as freelance projects, rental properties, investments or royalties. 

When applying for a loan, highlighting these sources of income can demonstrate your capacity to meet repayment obligations, thereby enhancing your eligibility.

Can I Use My Assets as Collateral?

In the absence of regular employment, offering collateral can mitigate the risk for lenders and increase the likelihood of loan approval. 

Collateral typically includes valuable assets such as real estate, car (see auto loans) or savings accounts, which serve as security against the borrowed amount. 

By pledging collateral, applicants provide lenders with recourse in the event of default, thereby offsetting the perceived risk associated with non-traditional employment situations.

How To Build a Stronger Credit Profile

A robust credit history can significantly influence loan approval decisions, irrespective of employment status. 

Timely payments, low credit utilization and a diversified credit mix reflect responsible financial behavior, instilling confidence in lenders regarding your repayment capacity. 

Prioritize maintaining a healthy credit score by managing existing debts judiciously, monitoring your credit report for inaccuracies, and avoiding excessive credit inquiries.

Can I Use Co-Signers or Guarantors?

In situations where securing a loan independently proves challenging, getting the support of a co-signer or guarantor can strengthen your application. 

A co-signer, typically a family member or trusted friend, agrees to assume responsibility for loan repayment if the primary borrower defaults. Similarly, a guarantor provides a financial guarantee to the lender, offering reassurance regarding the borrower’s creditworthiness. 

By involving a co-signer or guarantor with stable employment and a strong credit history, applicants can enhance their credibility in the eyes of lenders, potentially leading to more favorable loan terms.

What Are The Specialist Loan Options Available?

In recognition of evolving employment trends and changing borrower demographics, financial institutions have introduced specialized loan products tailored to accommodate non-traditional employment arrangements. 

These include self-employed mortgages, personal loans for freelancers, and small business loans for entrepreneurs. 

Such offerings often feature flexible eligibility criteria and customized repayment terms designed to cater to the unique needs of self-employed individuals and unconventional borrowers.

While securing a loan without traditional employment presents challenges, it is not a total barrier to borrowing. By exploring some of the avenues in this article, individuals can enhance their prospects of loan approval. 

However, it’s essential to exercise caution and conduct thorough research to select reputable lenders and negotiate favorable terms. Ultimately, with careful planning and diligent financial management, individuals can navigate the loan application process successfully, even in the absence of conventional employment.

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How To Find a Legitimate Lender Online

Money

There are a number of lenders out there who claim to offer a safe and reliable lending service, but are these always accurate?

When looking to borrow any type of loan from a lender, it’s important to ensure that they are a trustworthy provider to borrow with and to entrust your personal details with.

Otherwise, handing such sensitive information over to an untrustworthy service can come with some significant, perhaps damaging consequences – or you can find that you are overcharged or there are upfront fees taken from your account.

Thankfully, there are a few tell-tale signs you can look out for to differentiate between the lenders to trust and the lenders to avoid. In this article, we explore some top tips on how to borrow money safely.

1) Check The Lender is FCA and SEC Authorised 

The Financial Conduct Authority (or FCA for short) is the UK’s financial watchdog and SEC is for the United States, which both sets and enforces the regulations for loans and rules that consumer credit firms must operate within.

If you’re unsure whether the lender you’re looking at has been authorised by the FCA, you can check this via the FCA’s Financial Services Register. Users can search this list by using the postcode of the firm, their name and reference number.

The Financial Services Register can help users find out if the lender they’re looking at is authorised to offer the services it’s currently offering, the exact types of activities they are authorised to carry out, as well as details of the firm including the main business, contact details and trading names.

2) Check the Website for Signs of Legitimacy

There are also a few features of a lender’s website that can help to suggest they are a legitimate business.

One sign to look out for is if they have their full contact details clearly displayed on the website, making it easy to reach them for any queries or concerns you may have. Be sure to check the terms and conditions too for details including company name, address and how they use your information.

Another sign is to check whether the website has HTTPS. Check to see whether there’s a padlock symbol by the URL. If it’s there, the website is secure. If there isn’t a padlock you shouldn’t use the website.

3) Check Reviews and Social Media

Another great way to check the trustworthiness of a lender is to explore their reviews – e.g., through Trustpilot and other reputable review sites. These reviews can give you a realistic insight into the experience customers have had with the business, which can help you to assess whether their services are safe for you to use.

But you must be critical when looking at the reviews, since having only good reviews might seem unnatural and perhaps they are not real, so you want to have a fair balance to get a good idea.

Similarly, you should check social media for activity and engagement, since a legitimate company will be posting on facebook and twitter regularly and also getting feedback from customers – and this is a telling sign of a real company.

4) Check the Language and Any USPs

The common language used by rogue companies includes ‘guaranteed’ or ‘100% approved’ – meanwhile we know that all customers should undergo checks to ensure that they can afford repayment without causing financial difficulty, especially if they have bad credit.

One should also be conscious of any USPs or terms that require you to make a payment before receiving a loan – since you should never have to put down money upfront. This is a common sign of an illegitimate lender.

Finally, good lenders are transparent, clearly stating their fees and how much a loan should cost – and this is always a good indication of someone good to work with.

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How to Find a Better Loan Deal Easily in 3 Steps

Business Finance

When taking out a loan, the most important factor for most people is the interest and repayment schedule. If you’re struggling to find a loan that isn’t a great deal, then it’s time to do some digging. With a bad loan, you may be struggling to pay it off or find that it’s not even worth borrowing.

If you’re not sure how to get a better loan deal, these three steps will get you the best loan for your needs.

  1. Find the Right Loan Type

When it comes to taking out a loan, you should find the type that meets your borrowing needs. For example, there are short-term loans which may be ideal for a short-term need. In contrast, a long term loan is usually repaid over 2-5 years or possibly even longer.

Before moving forward, make sure to decide which type of loan is going to be best for your situation. Consider the purpose of the loan, how much you can afford to pay on the loan each month, and other features that may be important for you.

  1. Compare Loan Options

Now that you have an idea of the type of loan that will suit your situation best, research your options and compare features. If you have a less than perfect credit history, you could use sites like www.badcreditsite.co.uk or other instant comparison type sites that provide “easy loans” to compare loans that you’re eligible to take. This is usually done without checking your credit file

This is a great asset and well-worth your time. This is especially important if you have poor or no credit and need to determine what’s going to work best for you.

When you’re comparing loans, only compare loans that you’ll be eligible to take. Not all loans are available to all lenders. Make sure that you have all of your financial information ready when searching for loans in order to provide an accurate picture of your finances. This will allow you to qualify for appropriate loans and make this process more efficient.

  1. Take Out the Loan

Now that you’ve researched the type of loan that you need and what lenders will borrow to you, the last and final step is actually to take out the loan. Always double-check the interest rate that you will be charged as well as any upfront and ongoing fees. The comparison rate will provide you with the overall cost of the loan. You can see what your monthly payments are going to be and then determine if you’ll be able to afford those payments.

Once you’ve found the loan that you can make payments on, apply, and you’ll receive your money. Check the terms and conditions to determine how quickly you’ll be able to access funds.

When it comes to the steps needed to take out easy loans and get a great deal, these three steps are all that’s needed.

It may be surprising for some borrowers who haven’t been able to get good options before.

However, people with bad or minimal credit can usually qualify for several loans. Using a website that allows for easy comparisons is a crucial part of getting the best deal.

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Is A Payday Loan Right For You?

Freedom Channel

Before taking out any kind of loan, it pays to make sure that it’s definitely the right decision for you and your financial circumstances. Different kinds of loan suit different situations; a long-term DIY project, for example, might be better suited to a second mortgage or a heftier loan from a bank, while a short-term expense means taking out a short-term loan might be a good idea.

Nowhere is this maxim more true than in the world of payday loans. Payday loans have garnered a bit of a bad rep from the media, but that rep is undeserved; they’re just like any other kind of loan, but some unscrupulous shark companies managed to gain a bench in the court of public opinion before greater financial regulations led to these companies ceasing business operations. In reality, there are a number of situations in which a payday loan is a great idea for you. Here are a few situations where payday loans would come in handy.

When your credit rating isn’t great

No matter how reputable or understanding your bank may be, if you don’t have a great credit rating you’re just not going to get accepted for a loan. Credit score is often the watermark by which you’re judged for a loan; if the score is low, you won’t get credit, no matter how solvent you may currently be. There are a number of ways to improve your credit score, but most of them are long-term and some of them even involve taking on more debt. Payday loan companies, by contrast, will usually approve you for loans even when your credit score is low. By taking out a payday loan, you can easily avoid the embarrassment and difficulty of applying for a loan only to be rejected when your credit score isn’t up to scratch.

If your car stops functioning

If you’re anything like us, then your vehicle is the absolute backbone of your life. You can’t imagine going anywhere without it, and on the rare occasions when you do use public transport you feel naked. Your car is crucial, especially if you’re driving somewhere remote or distant for work. With that said, if your vehicle breaks down and you just don’t quite have the cash to cover the repair cost before payday, that’s when a payday loan might come in handy. You can apply for a quick, easy cash injection, then pay it back once your pay comes in. There’s nothing more important than peace of mind when it comes to your primary mode of transportation, so if you find yourself at a loose end, don’t be afraid to go for a payday loan.

When you’ve done your research

We said earlier that payday loans are just like any other industry when it comes to disreputable companies, and that’s absolutely true, but despite tighter financial regulations, there are still companies operating out there which – simply put – shouldn’t be. Before you take out a payday loan, make sure you’ve done solid research into which companies will do right by you. Before taking out a loan, the loan company should make your options clear and obvious; they should, optimally, discuss the loan with you before approving; and they should make the process of repayment, as well as what would happen should a repayment be late or non-forthcoming, crystal-clear. Don’t take out a loan until you find a company that satisfies these criteria, as well as any you might personally have.

When a friend or family member needs help

Here’s a situation that will be intimately familiar to many: a close friend, relative or partner suddenly loses their job. They turn to you for help, because they trust you and they know you’re financially solvent, but you’re saving for something important. How best to help them? Well, why not consider a payday loan in this circumstance? Taking out a small, quick loan will enable you to help them in the short term, then when they’re back on their feet again they can see about repaying you. You’ll be able to dip into your funds in a much more consistent fashion to repay the loan rather than drawing out money in a lump sum to give to your loved one, and they’ll thank you for being their rock in hard times.

When another debt is close to being repaid (careful!)

We want to slap a massive caveat onto the front of this one: do not use payday loans to attempt to pay off significant debts elsewhere in your life. Doing this will only lead to heartbreak as the loans pile up; if you’re not solvent enough to make regular repayments on debts, you’ll need to speak to a financial advisor or someone at the loan company to make bespoke arrangements rather than simply transferring the debt somewhere else. That said, a payday loan can be a great option if you just need to cross the finish line on a loan that’s seriously close to repayment, but for whatever reason you just don’t quite have the funds to spare in your bank account. Paying off the payday loan once payday comes will be easy, and you’ll rest easier knowing that the bigger and more pressing debt is paid.

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Plan Your Way to a Better Credit Score

Money

If you’re like most people, you’ve probably thought about improving your credit score. It can sometimes seem overwhelming, which is why creating a plan to fix your credit is a great place to start. The good news is that there are many things you can do to improve your credit score. Many of these are easy to accomplish and can make a huge impact in a relatively short period of time. This article will address some tips and plans you can follow to get started on the road to a healthy financial future.

Credit affects us on a regular basis. If we have great credit, it’s easy to get approved for personal loans, credit cards, auto loans, and anything else we may desire. If we have poor credit, the story goes much differently. While loans for struggling credit exist for those who need them, the amounts are typically capped at around $2000. While useful for a family covering the cost of groceries for a month or paying for a car repair, such relatively small sums are impractical for big life-changing purchases.

Fortunately, there are much easier ways to fix your credit problems. You first must come to terms with exactly what your financial situation is. Knowing what’s on your credit report is the first step. Many services online will be able to provide you with a credit report for free or very little money. After you review your debt, you can begin formulating a plan. If you have many accounts in collections, you may want to consider a credit counseling service. Unlike so-called credit repair services, which are unable to do anything for someone they can’t do on their own, credit counselors help consumers to plan their path to improving credit. They provide insights custom tailored to the specific situation a person is going through, and while they don’t promise a silver bullet solution, they can provide invaluable assistance in formulating a proven way to fixing their bad credit.

Another way to fix your credit is to not apply for credit when it isn’t absolutely needed. Inquiries on your credit report reduce your score. Also, having excessive lines of credit will reduce your score as well. Close accounts that aren’t active. If you do have credit cards that are in good standing, try to pay as much towards them each month as you can. Credit utilization under 30 percent is considered to be optimal. Whatever you do, try to avoid bankruptcy. This has a long-term and often devastating effect on your credit. Instead, attempt to negotiate reduced settlements in order to clear your debts. Many companies will be happy to take some money than none at all. Some companies will also negotiate settlements on your behalf. However, this is, of course, for a fee.

All it takes to get your credit back on track is a little work on your part. Take the time to look at your financial picture and see what you can do to make it better. If you need help, it’s readily available. Once you’re able to get your credit score up, you’ll have much better credit terms. Remember, it’s up to you to act responsibly and use credit wisely.

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When You Should and Shouldn’t Take Out a Loan

Finance

There are many reasons why people apply for a loan. Sometimes people apply for loans out of necessity. Sometimes people apply for loans to buy products or services that are not really needed. It is important for people to understand the cost of taking a loan. There are many factors affecting the cost of getting a loan, such as your credit score, your assets and your job. The size of a loan varies from a few thousand dollars to a few hundred thousand dollars. There are many reasons why someone should take a loan or should not take a loan.

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Why you should take a loan

1. Buying your first home

This is one of the good reasons for you to apply for a loan. A home loan allows you to own a home instead of renting an apartment. The loan can be repaid in 15 or 30 years and you will get the lowest interest rates if your credit history is good. A home loan also gives you tax benefits, and can be easily calculated with a no charge tax tool!.

2. Student loan

If you are a student, then applying for a student loan is a good choice, as it allows you to get a degree in an area that offers good job opportunities. The government backs most of the student loans and the payment terms are very generous. The loan offers a way of funding your future.

3. Loans for Investments

If you are financially independent and responsible, then you can take loans to fund your investments. For example, you can borrow money to buy investment properties. These kind of loans are not suitable for regular folks. You must have the necessary financial knowledge and assets to apply for such loans.

Why you should not take out a loan

1. Bad credit history

If your credit history is not good, then you will not get the best loan terms. You must work on increasing your credit score before you applying for a loan. Typically, banks and lenders will charge you higher rates if your credit is not good. If you are someone with a poor credit history, then you should refrain from taking a loan.

2. Purchasing assets that are depreciating

If you are planning to buy assets such as automobiles, which are depreciating over periods of time, then you should not consider taking a loan. It is always recommended to take a loan to purchase items such as a home, which are appreciating in value and act as a hedge against inflation. Most people are in the habit of purchasing depreciating assets such as furniture, TV, smart phones, and automobiles by taking high interest loans. This is not a good idea.

3. Private loans

There are many private loans available today. These are very expensive. You will end up paying very high interest rates. It is always recommended to get a loan from major banking institutions and lenders. If your credit is not good, then you may be tempted to get private loans. You should not consider this option unless it is for an emergency situation.

4. Borrowing from credit cards

Credit card companies offer balance transfers. However, after the initial period of lower interest rates, the interest rates will increase drastically. Your monthly payments will go up. Do not fall for high interest balance transfer offers from credit card companies.

There are many reasons why people take out loans. However, there are not many good reasons why people should take a loan or should not take a loan. Some of the reasons listed above are helpful if you are a would-be borrower planning to take a loan. Taking a loan is a financial burden and should be avoided unless it helps you to accumulate real assets, which are appreciating and lead to financial independence.

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Ways to get a loan when you have bad credit

Finance

If you have a poor credit rating, that means banks, credit unions and other financial organizations will define you as “high risk” and most likely refuse to lend you any money. As such, if you’re having trouble saving money and need to get hold of some cash quickly you should try  one of the residential bridge loan lenders before you feel as if you’re at the mercy of notorious pay day loan companies that charge enormous interest rates on their loans. But you should be wary of pay day loans as they often lead to a vicious cycle where you end up borrowing money before your pay check comes simply to pay off last week’s loan, and on, and on.

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So what private money lender and other options do you have to obtain cash fast?

Obtain a car title loan

If you own a vehicle, a car title loan is definitely a good option. Car title loans are quite similar to how pawn shops operate, in that the lender will asses the value of your vehicle and make you an offer based on that, with your vehicle being used as security for that loan.

If you accept the loan, the lender will keep hold of the title of your car until you have paid back the full amount. These loans are usually short-term loans though the interest rates are more affordable than with pay day loans. Make sure you do pay the loan back however. If not, the lender could repossess your vehicle.

Borrow from your friends or family

This is the most obvious option when you’re caught short. Most people know someone, either their parents or a sibling, or a rich mate, who can afford to spot them a few dollars if they need. Still, be sure to pay the money back, because not doing so is one of the fastest ways to poison a good relationship. If you’re looking to borrow a large amount of money from a friend or family member, it might be a good idea to legitimize the loan by creating a contract that includes the terms of the loan and the amount of interest to be paid, if any.

Apply for a peer-to-peer loan

Unfortunately not everyone has rich friends and family, but that doesn’t mean there’s no hope. A relatively new form of loan called a peer-to-peer loan might be a good option. This kind of loan is obtained from an online platform wherein you borrow cash from an individual as opposed to a bank.

Borrowers simply post a listing on one of the multitude of peer-to-peer loan sites asking for a certain amount of cash and stating what it’s needed for. Investors can then review your listing and decide if they want to loan you the cash.

Lenders will still check your credit rating, but because they are individuals you’ll likely be granted a lot more leeway, which means even those with bad credit have a good chance of borrowing the cash they need. In addition, peer-to-peer lenders usually offer lower interest rates than banks.

Pawn some valuables

If you have any valuable possessions you can choose to pawn them at a local pawn shop. The way it works is very simple, the pawn shop will appraise the value of whatever it is you wish to pawn, some jewelry for example. Based on that appraisal, the pawn shop will make you an offer to borrow some cash (at interest) and then you must agree on a time frame by which you can repay the loan and claim back your items. Be warned though, if you don’t pay up in time the pawn shop has every right to confiscate your items and sell them to recoup the money it has lent you.

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