Small loans for people unemployed people. While being without a job closes many doors to borrowing money you might be surprised to know that there are ways to get credit. Unemployed individuals may find it challenging to get a loan from their bank or building society. Sometimes you might have to secure your loan on your property which makes the idea of borrowing even riskier. When you are unemployed and only drawing benefits, you may not feel you are able to obtain any kind of cash advance loan, as banks have become stricter in recent years with their eligibility criteria to prevent bad debt from showing on their balance sheets.
The majority of small loans for unemployed people on benefits are only accessible via specialty lenders and bad credit lenders that do not use a credit score for determining loan eligibility. Read about two ways in which you may obtain a small loan if you are unemployed and receiving benefits.
Small Loans for Unemployed People on Benefits: Pawn Shops
Even though Pawn Shops have developed a bad reputation over the years they still provide an invaluable service to unemployed people or those who have sporadic income. Pawn shops have long been providing small cash loans for individuals in need of financial assistance. As a result of the declining economy and stricter lending practices of banks, pawn shops have seen resurgence in popularity for individuals seeking pawnbroker lawns and purchasing items at discounted prices.
As demand has surged for these services a lot of unscrupulous loan sharks and lenders have disguised themselves as High Street Pawn Shops. Be very careful before you borrow and always know how much you have to pay back as well as the rate of interest. For individuals seeking a pawn shop loan, the pawnbroker offers a cash advance for people in need of fast cash that can secure the loan with collateral. Collateral can come in a variety of forms, such as jewellery, electronics, guns, coins, cars, musical instruments, motorcycles, appliances and recreational vehicles.
People sometimes even use their cars and luxury items like fine wine and paintings to obtain credit. They key to getting a good loan is to get your items appraised properly and fairly. Most lenders want to devalue the collateral item so that in case of default in payment they can sell the item and make a handsome profit.
Small Loans for Unemployed People on Benefits: You Can Get Fast Same Day Cash For Emergencies
The process of receiving your cash in your account is relatively simple and sometimes given straightaway. Take your collateral or valuable item to your local pawnbroker. Bring along any relevant accessories, owners manual or title, sometimes a receipt helps. Your pawnbroker will evaluate your items value. Typically, pawnbrokers will give an unemployed individual on benefits a cash advance loan for 50 percent of your items assessed value. The reason they only give 50% is so that they can make a profit by selling the item at 70%. Another reason you are only granted a loan for 50 percent of your items value is due to the fact that your collateral must also cover the accrued interest on the loan amount.
Pawnbrokers are Convenient For Small Loans For People With Bad Credit
Unfortunately Pawnbroker loans available to unemployed generally run for a period of 30 days. However, some pawnbroker loans can have a repayment period for as long as six months in areas like the UK where there is better consumer protection and regulation. You do pay interest over the life of the loan, and interest rates can run as high as 500 percent, I have seen some loans at 1000% so it is very important to be careful. These loans take minutes to process, and you will leave with money in your hand. Most pawnbrokers will give you a receipt or some sort of paperwork that links your loan with your collateral. After you pay off the loan in full with the required interest, you will be able to redeem your collateral. Pawnbrokers rely on you defaulting on your payments to make more money; they have a great business model where they generate great profits from the overinflated APR interest rate and explosive profits from selling the collateral if you default.
Small Loans for Unemployed People on Benefits: Payday Loans Warning Make Sure You Check The APR!
Sometimes Payday loans, also known as doorstep loans, are a good alternative to a pawnbroker loan if you do not have any collateral or valuable item. Unemployed individuals receiving benefits can qualify for a payday loan. Payday loan lenders will supply you with a small cash loan. These loans tend to only provide a very small amount of cash, ranging from $100 to $2,000. Most are usually less than $500. However, these loans also yield extremely high interest rates falling between 300 to 500 percent and sometimes even 1000%.
Some states regulate the amount of interest payday loan companies can charge. These companies justify these high interest rates because unemployed individuals are considered high-risk customers. Even if a high proportion of clients default they still make money from those who see the loan through. Most of the time payday loans are used for emergencies such as broken appliances at home. Washing machines and cookers are the biggest culprits, many people now understand this and instead of taking out loans at incredible interest rates they are insuring their appliances against breakdown which is much cheaper.
Pawn Shops Are Starting To Get More Competitive in Providing Emergency Loans For Unemployed and People on Benefits
To qualify for a doorstep loan, you will need to provide proof of citizenship for a loan in the U.S. or UK. You must prove that you are at least 18 years of age. Additionally, you need to have a checking account to verify your ability to receive funds. You will also need to provide your passport and utility bill for address and identity verification. After applying for your loan, you will receive your funds usually within 24 hours deposited directly into your checking account. Expect to pay between $20 and $30 per month for every $100 you borrow until your loan is paid in full. The life of a payday loan is usually only 14 to 30 days, as you are expected to pay the loan back when you receive your next benefit check. It is very important to organise your finances so that you have the ability to pay without compromising your need for essential item such as food and energy.
Payday loans can truly help you get quick money to pay for an emergency such as an appliance breaking down. Unfortunately, after you have paid your expense, you are left with far less money due to the high interest rates so it really makes sense to avoid this as much as you can (this should be a last resort as you will be poorer the more of these loans you take out). This will leave you with fewer funds to pay your expenses the following month. If you know, you are not going to be able to make ends meet, dont borrow money from a payday lender, as there may be significant fees attached that will consume your entire benefits check.
This can leave you with no funds to meet your basic needs. Seek counselling from a free credit service or financial counselling agency. Try to budget your income and look for ways to make cut back on non essential goods such as magazine subscriptions and contract mobile phones. Try and save energy and find ways to save money on travel and clothing by using a bike or buying from a charity chop. Once you have your expenditure under control look for ways to increase your income through training and development. If you can budget effectively and save money then your position will be better. Thank you for reading Small Loans for Unemployed People on Benefits.