No ‘hope’ faces hindrance now
By: Aisha Cristal | Posted: 04th February 2008
Like most of the unforeseen events in life, nobody is prepared enough to face the inconveniences being forced upon by unemployment. Within months of losing job, finding means to meet your requirements becomes tough for any individual. The situation gets grimmer if the jobless individual is not a homeowner as the loan market is somehow lenient to the homeowners only.
A question that crops in most minds is why the unemployed people need a specialised loan, and why they cannot be financed under regular loan plans. The attitude of the lenders is the reason for such a situation. As the unemployed people lose a stable source of income, their creditworthiness is lost and the lenders find it hard to have faith on them. This situation leaves the lenders with two options - either reject the loan application of the unemployed person altogether or offer them loans against residential property security. However, currently there is a change in this attitude and lenders are now providing loan plans to unemployed without residential property security.
Loans for unemployed identify well with the concerns of the borrowers without a job or steady income, and thus, prove a more potent technique to fight in times of unemployment. The credit rating of the borrower is at its ebb during unemployment. Hence, the amount offered as loan without any residential property security is generally lower compared to the secured loan plans, the highest limit being 25,000 pounds. This amount can be used for any legally correct purpose as desired by the borrower. Repayment period generally varies between 1 year and 10 years.
Lenders perceive a greater degree of risk in offering loan plans to the unemployed. Hence, the rate of interest is on the higher side. The relief for the borrower comes in form of annual calculation of interest and monthly easy payback pattern. Interest is calculated annually to ensure that the borrower repays a lower amount compared to credit cards and overdraft. No extra cost is charged on the borrower for loan processing and the borrower repays nothing extra than principal and interest. E-lending facility is also available to make the loan application hassle free. The borrower can enquire about the terms and conditions; compare interest rates at different lenders and apply from home or office by logging on the Internet.
Unsecured loans for unemployed people are processed fast as the lenders do not need a property valuation. The fastness is also due to the reduction in paperwork.
For more information about loans: Debt Management , Bridging loan UK , Personal loan UK
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Tags: lenders, credit rating, borrowers, secured loan, rate of interest, overdraft, repayment period, unforeseen events, loan application, creditworthiness, residential property, inconveniences, stable source, loan market, degree of risk, unemployed person, property security