As per a source, the unemployment figures are rising again in the UK. As per Cities Outlook data, “Over 3 million working people are involuntarily hidden and inactive as per the annual assessment.”
While the official statements reveal the unemployment rate at 3.7%, the actual unemployment rate is three times higher at 12.1%. It includes not only those actively looking for jobs but the ones too who are not looking for jobs due to certain circumstances.
The hidden unemployment rates clearly show how the ongoing crisis is deepening the regional divides across the country. The government must deliver the levelling up agenda, flourish and support job creation.
The blog lists some aspects of unemployment life and how emergency loans can help them overcome. It also lists some ways to spot verified emergency loans as unemployed.
How does unemployment affect overall lifestyle?
Rising unemployment rates signify the derailing economy and pensive concerns. It not only impacts the pockets but mental well-being as well. Savings may not last for over 3 months. The struggle is real.
Mounting bills and important expenses like child education fees, credit card payments, utility payments, food, and groceries highlight the crisis. Moreover, countering emergencies like- sudden medical accidents, credit card crashes, or repairs becomes almost impossible.
The options to counter such circumstances are limited if relying only on benefits. Thus, emergency loans for the unemployed in the UK for no-income individuals emerge, relieving them in the face of distress. They are alternatives to traditional loans that require stellar credit and finances to qualify.
How do emergency loans work and ease up the lifestyle?
Fast or same-day loans are for that one with low income and credit scores. It is unlike those loans that require one to meet cumbersome requirements. Instead, one may qualify for short-term cash needs like- £1500 for urgent purposes.
Unemployed individuals may qualify if receiving benefits and hold a part-time income source. These are unsecured loans that do not require collateral. It only requires one income proof in the form of- part-time income or benefits.
You may get low-interest rates if your previous credit management history is stellar, with no hefty loans in the credit report. You can repay the amount in easy monthly or weekly instalments as per your capability. These loans are easier to manage and pay off despite stringent finances.
Here is how it eases up the lifestyle more:
1) Same-day cash disbursal
You do not need to worry about the amount getting delayed as the loan requires no cumbersome credit screening or documentation. You can get the loan amount requested in your account within 10-15 minutes of application.
2) No guarantor is required
Generally, if you apply with mainstream lenders as an unemployed, you may face loan rejection. Why? It is simply because they find it risky to lend money to someone with unstable finances. They thus mandate a guarantor on the loan.
Alternative to this, emergency loans prioritise independent financial management. It enables one to avoid unwanted interference in the financial sphere. It is ideal for students or tenants needing immediate cash for minimal needs without disturbing their loved ones.
3) Flexibility to change repayment structure
Lenders understand that as unemployed, one struggles to ensure regular cash surplus. It grants them the flexibility to revise the repayments. Lenders may re-schedule the repayments if you find it hard to pay on time.
4) Anyone with regular/part-time income may qualify
You may qualify for emergency loans if you are an 18+ UK citizen with a regular or part-time income. It does not have any stiff guidelines.
What are critical requirements apart from being a Country citizen?
It is a fact that unemployed individuals struggle the most while searching for and fixing a lender. However, if you partner with the right one that only needs valid income proof, things get smoother. Here are some eligibility requirements that a lender may mandate before providing the loan:
- Proof of income in the form of benefit slip, rental income slip, bank statements
- Ensure a valid debit card
- Should own a valid email and residential address proof
- Employment History
Which benefits qualify for a personal loan if unemployed?
Sometimes, it is not mandatory for you to receive income just from your employer. Instead, you may get one even if you are on government benefits. Here are some benefits that you may qualify with:
- Unemployed benefits
- Social Security Payments
- Disability payments
- Investments
- Child support
Apart from these, you may get these loans if you hold income in the form of scholarships, pensions, rental income, or alimony.
5 Best Ways to Find the Best Emergency Loans as a Jobless
If you are new to the concept or are applying for the first time, the below checklist will help you ensure approval in a single attempt.
1. Identify the APR on the loan
APR is the overall loan cost that decides how much you pay at the end of the loan agreement. Missed payments or defaults may increase APR. Choose a lender offering the lowest APR. It would help you manage repayments better. You may generally spot a high APR if applying with bad credit. Still, analyse the lowest ones among the choices to partner with.
2. Identify whether the lender is legit or not
It is one of the most important aspects of emergency loans. Individuals often fall for vulnerable loan fees. Thus, check the authenticity of the lender from the FCA register. If you find the company name there, you can apply without worries.
3. Check the loan term that a lender offers
Ideally, a short loan term is best to avoid interest rate costs and pay the loan quickly. If you need a loan as an unemployed, check one by offering a longer duration of repayments.
It would help you budget for the payments and pay comfortably. Go for the one offering the best APR and long repayment term. For example, if a lender offers 6 months of repayment terms but a high APR, go with the one offering 6 months of repayment period with a low APR.
4. Flexibility to choose the repayment structure
Some responsible and experienced lenders grant customers the flexibility to choose repayments as per affordability. If you find one -choose it instead of the one with no such flexibility. For example, if you receive your income from benefits income every month, the best loan would be the one that grants you the freedom to pay the repayments by the month’s end.
5. Prioritise Transparent fee structure
It is also one of the most important parameters to check while availing of emergency loans. Unregulated and hidden loan fees may imbalance your repayments and lead to default.
Thus, identify the loan establishment fee, pre-payment fee, loan arrangement fee, closure fee, etc., before signing off the final agreement. If you are unclear on some loan fees, clarify the same from the respective lender.
How to qualify for a higher amount, like £5000 as an unemployed?
Sometimes, you may need additional cash flexibility. Some emergency loans have a lending standard that limits the amount to 1500-2500 (maximum). The reason is inconsistent income and credit score. However, there are some ways you may qualify for a 5000-pound loan at a bad credit score:
- Get a guarantor or a third person with strong credit and income for instant loan approval.
- Provide additional income proof apart from benefits. It should be higher than £5000/month.
- Should ensure presence on the electoral register.
Bottom line
It is a small glimpse of how emergency loans for the unemployed operate. Additional income or cash flexibility helps manage the repayments better. Borrowers that reveal a constant effort to gain suitable employment are the lender’s favourite. It is about consistency and dedication toward improving income and paying the loan.
