Proving your repay capacity to the lender, when you are unemployed is perhaps the most difficult thing to do. The loan company cannot take the risk to lend a person who cannot repay the loan back while you have no choice but to get the loan. What to do then?
There are funding choices available in loans for unemployed but they demand the applicant to qualify on some basic parameters of repay capacity. They know you do not earn a regular income presently, but at least you should look credit worthy. Of course, being a jobless person, you do not have many reasons to prove your financial potential. But there are few ways that suggest you how to look trustworthy in the eyes of the lender. If you try them, the success in the form of a loan approval may come to you.
How to do it?
The following ways can help you prove that you are not a risky borrower for the lender. Take a look
- Gather your Previous Job Salary Slips as Income Proof
The loan companies already know that you have no regular income today. However, your past salary proof matters a lot. If you were earning pretty penny as salary, the lenders can find approving your loan easy.
- Present Proof if you were Made Redundant
It is not always necessary that you lose a job because of your incompetency. Sometimes companies and employers have some weaknesses or strategy rules that make them let go some of their employees. In such conditions, they give a written proof to the leaving employee explaining the reason. If you are jobless due to redundancy, then present the company letter to the lender. When applying online, you can attach the scanned copy of that letter or can mention somewhere with the due details.
This is going to make the lender realise that you are capable to earn and also to repay. It is due to company’s own reasons that you lost the job. But you are competent and soon will find a new job.
- Provide Guarantor or Collateral, if Possible
Finding a new job can be tricky and time consuming. In that case, managing expenses with the limited available money for a long time is impossible. You may need a big amount, which can help you gain financial stability for a long time. In that case, instead of going for short term loans for unemployed opt for some guaranteed or secured funding option. Such loans are long term with small monthly instalments and lower rates. There are affordable deals in the short-term loans too but for big loan amount, there is no harm in availing funds for long tenure.
- Offer Letter of the New Job is the most Promising Thing
Well, this is something of worth. Yes, you are jobless but soon you will join your new job. You have cleared the interview and have the offer letter of your new job in your hand. The lender will be relieved to see that soon you are going to have a regular income and repaying a loan will not be a problem for you.
- Unemployment Benefits are one of the Ways
If you are receiving any sort of financial help through unemployment benefits from the Government, you should present its details to the loan company. It will prove that the money you receive on benefits can be used to repay the instalment if required. There are several loans for the unemployed on benefits. You can apply for such loans directly. However, remember that some lenders do not provide funds to those, who are availing government benefits. While some lenders do provide loans without any objection, before applying make sure you have done your research on this part.
- Show if you have any Extra Income
Nowadays many people do some part-time or freelance work to earn extra income. If you have any such source of money, it is going to be a great plus point in qualifying for the loan. Give every related detail of that extra income. It is certainly going to help you.
These six ways are absolute to justify your repayment capacity. More you look financially promising and trustworthy, more are the chances to get the approval. Stay transparent to the loan providers and tell them everything they want to know. This also helps you establish trust in their eyes.