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Unemployed Loans[edit]
What do you mean by unemployed loan?
An unemployed loan is a loan that is available to you if you are currently unemployed. This may mean you are retired, on benefits, on job seeker's allowance, etc. Many lenders and loan companies provide allowances for people on benefits with bad credit. These are typically bad credit or no credit loans.
Unemployed loans will always have a higher APR than bank loans or high street loans as the people looking for unemployed loans are at a higher risk because they are either do not have any income or only have a small income.
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Who offers unemployed loans?
Peer-to-peer lenders – offer unemployed loans but you will more than likely be placed into a high risk category when you register for an unemployed loan with them. This means that you will get a higher interest rate and may even struggle to get your loan fully-funded by the other members.
Unsecured lenders – will have slightly higher interest rates and you will usually need to attend a meeting with one of their advisers to discuss the unemployed loan so they are confident you are going to be able to pay it back.
Guarantor lenders – offer loans to the unemployed with bad credit because to take out this loan you must have someone co-sign the loan agreement to say that if you do not make the repayments, they will. This person is known as the guarantor. Guarantor unemployed loans tend to have a higher interest rate.
Online pawn broker – they offer loans to the unemployed with bad credit as your loan is secured against a personal item of value, if you do not pay back your unemployed loan you will not get your item back. These are no credit check loans.
Doorstep lenders – will lend to most people including the unemployed and unemployed with bad credit. Typically have a really high interest rate and only lend a small amount and should be treated as a last resort.
Logbook lenders – are able to lend to the unemployed and the unemployed with bad credit as they hold the logbook for your car as security for the loan. You also have to sign ownership of the car over to them for the duration of the car.
Text lenders – offer unemployed loans as it is only for a very small amount for a very short time.
Credit Unions – are able to offer unemployed loans as they base their lending on whether you have a proven savings history with them or your savings history with your bank. They fully assess your situation to make sure you can afford the loan.
Characteristics of an unemployed loan
- High interest rates
- Short loan term
- May need to provide items as security
- Usually only small loans
- High extra charges applied if you don't repay it
- Will lose secured items if you don't repay it
- Quickly referred to a debt collection agency if you don't repay
- Could affect your guarantors credit history
- Will completely ruin your credit history if you don't repay
Which companies offer unemployed loans?
Example Loans:
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Loan type
- All UK Loans
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Loan Provider
- AA Financial Services
- Alliance & Leicester
- Bank of Scotland
- Close Finance
- Clydesdale Bank
- HSBC Bank
- Halifax Bank
- Littlewoods
- Lloyds Bank
- Marks & Spencer
- Marsh Finance
- NatWest Bank
- Nationwide
- Northern Bank
- Post Office
- RateSetter
- Reliance Bank
- Royal Bank of Scotland
- Sainsbury's Bank
- Smile Bank
- Tesco Personal Finance
- The Co-Operative
- Yorkshire Bank
- Zopa
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