Getting a loan is initially very easy. Banks and various other companies and even private providers advertise a wide variety of loans in many places. The loan offers are often presented at first glance as very favorable and attractive terms and repayment terms. Instant loans and lightning credits often promise a quick transfer to the account within a day. Installment loans, small loans with short terms, credit for 30 days, “money immediately and pay off later” and many other credit, credit card and payment offers seem to be available to every customer. In many cases, loans are also presented in such a way that they would be very easy to obtain without a Credit Bureau request or other information about the applicant’s creditworthiness and without bureaucratic obstacles. Some providers also offer loans to the unemployed, housewives, pensioners, students, trainees and other people with little or no income.
Not all providers provide loans to unemployed or unemployed people
With many credit providers, a request from an unemployed or unemployed person shows very quickly that the conditions of regular income are tied to the award. Since every lender is interested in repaying the loan granted and also wants to receive interest income, he is also interested in the secure future solvency of the borrower. Under certain conditions, banks lend to unemployed or inactive people.
In the case of installment payment transactions, too, it is not always asked about the employment status or the regular income of the buyer. For reasons of personal security and to counteract the risk of overindebtedness, unemployed people should think very carefully about taking out loans or entering into a contract when buying in installments. People who are familiar with their house bank with their account management over a longer period, perhaps of several years, with trouble-free account management and apply for a loan here have a good chance of obtaining a loan for the unemployed. Sometimes the most important aspects for the approval of a loan are the amount of the loan and also the amount of the installments to be repaid.
After deducting all monthly living expenses, such as rent, energy costs, expenses for food and other consumer goods, insurance and other household needs, the advance payment plan must have sufficient liquidity to pay the credit installments. Likewise, the age of the unemployed person, the job and the likely duration of unemployment or the future job prospects can play a role in the granting of a loan. If a return to employment is expected in the near future, the starting conditions for the borrower are more favorable than if the change from ALG I to ALG II and any long-term unemployment that may be more likely. The unemployed person should also check his situation very carefully. Household income is once again significantly restricted by the change from ALG I to ALG II, and the installment payments that are then still required for a loan taken out could lead to severe burdens.
Good and bad reasons for taking out unemployment loans
People with limited income should think very carefully about the need before taking out a loan or buying consumer goods and then paying in installments. In many cases, the installment payments for consumer goods have led low-paying households to liquidity problems and overindebtedness. If there is already over-indebtedness and a loan is applied for to replace old loans, this can lead to further financial emergency situations and also make the subsequent ability to repay the new loan unlikely. In this case, serious debt counseling should be sought. Good reasons for taking out loans as an unemployed person, but could be to improve their economic ability for the future, such as applying for promotional loans for further training or education.
Collateral increases the credit rating
Creditworthiness is generally understood to mean the creditworthiness of a person. This creditworthiness is made up partly of the reliability of a person and their willingness to meet their payment obligations on time and the other part of their economic ability shown in the past and predicted for the future to be able to pay for any payment obligations. Since this future economic ability is severely restricted for unemployed people, they do not have the required level of creditworthiness for many providers. However, if unemployed people can demonstrate a good credit rating for the past, for example by providing positive Credit Bureau information, and if they have the option of offering certain collateral to the lender, this increases their likelihood of getting a loan approval. The collateral required by the lender could consist, for example, in providing a guarantor, in pledging home or house property, and other valuables. Existing life and pension insurance or savings deposits could also be pledged or mortgaged.
The providers of lucrative loan offers for the unemployed should be carefully examined
Loans without a credit check or Credit Bureau information are generally only aimed at people who have a complete credit rating and who can prove this, for example, by means of corresponding credit balances in current accounts or savings accounts. Since there are also many dubious providers on the market for loans, it is strongly recommended that you obtain comprehensive information before taking out a loan. Unemployed people or people in financial need can very quickly get to a dubious provider with promises that initially seem attractive. Especially on the Internet there are many providers who promise “quick money”. In the worst case, there are very high costs for dubious debt advice and loan brokerage without ever obtaining the desired loan. Excessive payments in installments and interest can also lead to the debt trap.