Unexpected expenses can impact anyone at any time – not just those with a steady income. If you find yourself in a position where you may need to apply for a loan to cover an unavoidable cost while unemployed, you might be worried that you can’t borrow credit from a reliable lender.
Every lender will carry out an affordability assessment when you apply for a loan. This assessment is designed to help the lender decide if the loan you are applying for is manageable and sustainable for you.
Every lender’s affordability and overall creditworthiness assessments have different criteria, but in general, they may look at:
Depending on the considerations of the above criteria each individual firm takes, those who are currently unemployed may have a harder time being approved for a loan. However, it’s not impossible, as a thorough affordability assessment looks beyond your current employment record and at your personal circumstances.
You can apply for any type of loan that you think will best suit your circumstances. But, checking eligibility criteria will help to determine the loans that may be unsuitable for you.
Short-term loans can cover unexpected expenses and unavoidable costs, but they may not be able to cover larger outlays.
How can I improve my chances of being accepted for a loan?
Like anyone else looking to apply for a loan, there are steps you can take to improve your chances of approval.
Being approved for a loan when you’re unemployed is possible, but you may want to maximise your chances of approval before you start to apply.
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What you need to know about loans if you're unemployed