$5,000 UNEMPLOYMENT LOANS: SECURING LOAN APPROVAL WITHOUT AN INCOME

 

On the outside, it appears absurd, but there are lenders who are ready to allocate loans to the unemployed. This is foolish and beyond doubt, especially when the unemployed has no source of income, but yet, it is still possible to get a $5,000 unemployed loans when it is needful. How is this possible? Well, let us be frank and accept that $5,000 is not a large sum of money. This means that lenders can simply make up terms to their own benefits but if the borrower defaults, it won’t hit them very hard. Getting a loan authorized without an employment relies upon the same faith a student gets. Lenders will even give an unemployed applicant a chance to collect a loan, because there’s a strong belief that the unemployment is temporary. Allocating affordable instalment loans are therefore seen as a reasonable decision rather than a greater risk.

 

WHY ARE THE UNEMPLOYED ACCEPTED?

 

I ponder why the unemployed are accepted by lenders? Fortunately, the lenders are not unaware of the risk involved and more so, are not ready to give loans to every unemployed persons. But there are few cases where the outcome of defaulting is very low, in other words, allocating a $5, 000 unemployment loan is okay. There are basically two distinct types of unemployment. The long-term unemployed who have been jobless for many years, more so, the probability of getting a job is very thin. This type of unemployed person is not going to be acknowledged for a loan. Those who are hopeful of getting an approval without employment arethose who might have just been made redundant, but with at least a 6 months grace before the application was made. The reason behind this affordable instalment loan is that some kind of employment is likely to be found within the next year.

 


 

UNEMPLOYMENT LOANS EXPLAINED

 

If an authorization on a $5,000 unemployment loan seems opposite to what might be considered reasonable, be aware that the loan itself is used to maintain existing loan repayments and bills. For this purpose, there is an understanding that the loan is a stop-gap and a long-term instalment loancan suffice. Furthermore, the fact that the borrower is still a potential employer draws the attention of the lender. It is the same situation as a student loan whereby the loan is granted in utmost good faith, having in mind that the borrower will graduate soon and get a job. Likewise, lenders have faith which is sufficient to get authorization without an employment because the borrower will get a new job. Moreover, they must also give an affordable instalment loan because at this point in time, the means to meet normal repayment terms is absent.

 

TERMS TO LOOK OUT FOR

 

It seems as though a $5,000 unemployment loan is more charitable than business. To a large extent, that is true, but it is also a business strategy and lenders expect full repayment of the loan and on time. But what kind of term should be expected? Just like any other loan, the key terms are the interest rate and the repayment period. Furthermore, due to the fact that the lender is giving an authorization without employment, the interest rate will be higher in order to cover any potential loss and the repayment term is longer.

THE DISADVANTAGES OF BORROWING MONEY FROM A LOAN SHARK


Several Hispanics living in the United States find it difficult to acquire credit from a bank. It is possible to face rejection from a bank, if you request for a 4000 loans. If you don’t have a credit history in the U.S, you might be rejected a loan. You have experienced financial difficulties in the past and your credits have suffered. If you ever dream of owning your own home, buying a car or probably starting your own business, it will be challenging and costly to achieve these goals without getting and maintaining a sound credit. Because it is time consuming and needs good financial practice, several Hispanics get immediate help from a loan shark.


WHAT IS A LOAN SHARK?

 

When searching for money, you may hear people say: “I know this person who loans money and never ask for papeles”. This so called lender could be a friend of a friend, friend of the family or even a store in the neighbourhood. There are several disadvantages in making use of this service even though they claim to be rightful moneylenders. Weekly interest rates are charged. What exactly is the real cost of loans from a loan shark?

 

The lender gives a weekly interest rate rather than an annual one. Never forget that bank loans and other financial institutions always make use of annual interest rates. Take a look at this typical case: you are being given $1,000 and you agree to pay a weekly interest of 5%. In actual sense, 5% each week is translated as 20% each month, and if you must multiply this by a year (12 months), you get an interest rate of 260%! The payments are confusing –weekly interest rates that are quite low may translate up to 10, 20 and 30 times more interest that paying in a normal loan agreement.

 



The loans are difficult to pay off – as a matter of fact; they are created to be almost impossible to pay back. Several people who have acquired loans from these lenders end up losing more money than what was initially invested. They don’t work within the laws – If you have a complaint, there’s no one to report to, as loan sharks don’t have to abide by regulations yet alone protect you as the consumer.

 

In essence, it is best to avoid these types of lenders at all costs. In case you need money for your business or for an emergency and there’s no access to a bank loan, try to take a loan with ACCION which is a non-profit organization that gives business and personal loans as well as report all loans to the three main credit bureaus.