There comes a time when someone requires instant money but high street banks refuse to lend them. Of course, there are many circumstances when you find it tough secure a loan and the unemployment is one of them.
Unemployment is unpredictable and no one can judge how stressful it can be. Everybody needs a little extra cash to support his or her immediate needs. However, attaining a loan is never easy in the absence of steady income. There are many reasons for the rejection of unemployed loans.
Let’s take a look at a few reasons below:
- Absence of Employment
For securing a loan, it is necessary to have a full-time job. The major reason behind the loan rejection is a complete absence of employment. A steady income helps in supporting the timely repayment. Of course, convincing the lender to approve you for a loan despite no job is the trickiest task.
- Traditional Lending Firms
High street lenders are quite strict in terms of lending. They usually follow the old-fashioned way of lending and consider the unemployed individual a risky borrower. They always want the applicants to be employed. Therefore, considering traditional lenders for availing funds is one of the main reasons for rejection.
A tenancy can be another reason for rejections. It does not mean being a tenant; you have to survive a curse. You still have a chance to grab funds in an unsecured way. However, having your own house is a plus point to give the lender a reason for trusting you.
- Worst Credit History
Having a poor borrowing record reduces your chances of securing approval. Usually, lenders check out your past borrowing record to identify your authenticity. A few lenders do not allow the applicants to get the money despite no job and adverse borrowing record.
- Inability to Afford Repayment
Repayment is always a matter of concern for the lenders. After all, they are funding your needs at the time when you want. Most lenders look at your ability to afford the repayment when you are jobless. If you have any sort of income source to make the repayment, then the lender will approve you with no questioned asked.
After analysing the causes, you can work better for acceptance. Below are the effective steps that you should consider according to the causes:
- Apply for the Government Grants
This could be your first step. Receiving government benefits would not be something that you should be ashamed of. In fact, it is the feasible way to come out the cash crunches and consider the alternatives that help you improve the situation.
- Avoid High Street Lenders
High street banks are not the only option that you are left with. You should turn to private lenders instead. They believe in a modern way of lending and consider you with an alternate source of income.
- Bring Co-signer If Possible
Bringing a guarantor is another way to receive assured acceptance on loans. You can involve your friend or family as a co-signer if possible. This way you can improve your chances of being accepted for the loans.
- Consider Secured Borrowing with Bad Credit
Placing collateral is another effective way to raise your chances of getting accepted if you are out of the job and running in a bad credit situation.
Using the above-mentioned tactics make you a smart borrower and help you counter the unemployment with relative ease.
Now Build an Impressive Resume
Living as a jobless person is quite challenging. The loans bring you an opportunity to tackle the biggest challenge of running a family in a smooth manner. Now, you should focus on building an impressive résumé. After all, your skills are all that you need to present in an exciting way.
Now, upload your résumé and dress well to grab the opportunities waiting for you.