Trying to borrow money is never easy, especially when lenders ask you to fax the latest pay stubs to verify your income. When you are out of work, expenses continue to pile and whatever savings you have run out fast. Furthermore, unexpected expenses can pop up to taunt you: car repairs, home repairs, medication, etc. So lets look at which are the best loan types for people with no job to get some temporary financial relief by borrowing 500 dollars online.
There are lenders who can give you a personal loan, but they may ask for a credit check or some collateral to secure the loan. These may not be bad because they can help to lower the lending rates compared to other types of high risk loans for the unemployed. However, the downside is that approval rates are lower if you are a tenant or have bad credit.
While cheap loans for the unemployed are not impossible, you just need to spend more time asking around. Generally, try in the following order of these options when trying to get a loan while unemployed.
Secured loans are one of the cheapest loans for unemployed borrowers since it is backed by collateral placed with the lender to minimize the default risk. You can use your car as collateral such that in the event you cannot pay back the loan, the lender do not lose all their money. In return, you are allowed to borrow larger amount of money, up to 75% of the fair market value of your collateral.
Meanwhile, the lender will hold your car title or deed and return them when you have fully paid off the loan. That means you can still use the car or stay in your home which are being used as loan security. But if you default on the loan payments, the lender can legally take possession of the collateral and sell it to indemnify themselves for the balance owed.
Since secured loans are in favor with the lenders since they hold some lien over the loan payment, meaning they do not stand to lose out even if you default, you can ask for cheaper interest rates and longer payment schedules. Using your home or car title, you can get a long term 6000 dollars installment loan without a job or income.
Unsecured loans for the unemployed do not require you to borrow against the value of your collateral. Usually, these are signature loans where you just need to sign on an agreement stating the various lending clauses, interest rates, fees, payment etc. So why are some lenders willing to give unsecured signature loans for unemployed borrowers despite the higher risks? This is because lenders can charge more interest fees on such high risk loans in return and of course, they will carefully screen borrowers with a credit check to make sure the default risk is not as high as it seems.
Most of the time, you can get short term unsecured loans with no full time income but the maximum amount you can borrow is only between $100 – $1,500. For larger loans over 12 months or longer, you still need to take secured loans. And when you compare the loan rates, interest rates for $1500 unsecured loans are way higher.
You can find plenty of lenders for 30 days unsecured loans. These private party lenders can approve your loan in 1 hour and you get the cash in your checking account fast. There is usually no need to fax in many tax records or employment papers at all.
You can also get a credit card advance for convenience which is simply a loan against your credit limit. The typical cash advance fee is a percentage of the amount borrowed and note that there is no interest free grace period unlike the purchases of goods. Watch out for the interest fees, which can be as high as 24% or more which starts accruing once you use the cash advance. It is an easy way to borrow money, but also a very expensive way to do so.