If you have a steady income, you will normally not have any problems applying for a loan. Therefore, borrowers are thoroughly checked before a loan application is approved by a bank. Therefore, it is particularly difficult to obtain a loan when unemployed, which is not possible for some banks. When does a loan without a job make sense? Anyone planning to set up a business can also get a loan from the Federal Employment Agency for the unemployed.
Justification for a loan for unemployment
Especially in difficult life situations, credit often appears to be the only option. In addition, the unemployment rate is often short-lived, but it is still necessary to close the financial gap. Therefore, many people want to cover the loss of income with a loan. However, credit institutions often shy away from lending to the unemployed, even if unemployment benefits or other financial resources are available.
However, according to the law, the remuneration is not considered as eligible. In many areas, the market has become increasingly uncertain. Among other things, a temporary job can help an employee to become unemployed in an unforeseen manner. Unemployment Compensation II generally amounts to 60% of the salary previously received and is paid out for one year.
But those who have made little or no provision or are already economically weak, can come just after the beginning of the unemployment period in economic hardship. Depending on the situation, debt financing may become necessary within a few weeks. To take out a loan for unemployment, certain conditions must be met.
Basically, there are obstacles to lending to the unemployed. If you are unemployed and want to apply for a loan, you should be prepared for the fact that it can take a certain amount of time and effort. In many areas, the market is becoming increasingly uncertain.
The employee can unexpectedly change jobs and get into financial difficulties after a short time. However, the barriers to unemployment benefit loans are particularly high. As a rule, unemployed people have to offer more and different security than other credit seekers. For example, a solvent guarantor who is in charge of the loan with the unemployed is often needed.
So z. For example, the Targo banks are concentrating on lending despite high unemployment rates. For financial institutions, disability benefit is not a secure income as it is limited to one or two years. Often, the ability to provide credit is still available during the first year of unemployment.
As a “critical bridging period” they see the unemployed. For the credit institutions, the remuneration is not a secured income. Even in the first year of the unemployment rate, the credit rating is often guaranteed. Nevertheless, the unemployed often have to provide more security. Lending to the unemployed is possible under certain conditions. If, despite the high unemployment rate, you have long been one of the customers of your choice and always maintain good business relations, this can be a decisive plus.
It is therefore advisable to apply for a loan from your housing bank. Anyone who has known the borrower for several years can better classify the collateral of the loan application. This increases the chances of success in the credit decision. Nevertheless, we recommend retrospectively or at the same time a loan comparison in order to generate the loan volume on the best terms.
Also, the chances of success of a loan can be increased with the loan amount. The loan amount is also dependent on the duration. This should be as short as possible, because unemployment always amounts to not getting a new job in the foreseeable future and still switching to unemployment benefits.
When lending to the unemployed, many credit institutions require additional or alternative collateral: the principal debtors are solvent and their creditworthiness ensures a more positive overall rating of the company. Therefore, the unemployed should also consider which securities they provide before applying for a loan. Is the partner or sibling a suitable guarantor?
Thus, short-term loans for the unemployed can be awarded, at least in the first phase of the disease. If the counterparty default risk is split between two or more people, the risks to banks are reduced and they are more willing to approve the loan. First, the unemployed should make a loan comparison and also report to their bank.
Also, the amount and duration of the loan can affect the desired loan. However, credit institutions need additional collateral such as land charges or guarantees. The guarantor ensures a loan with his creditworthiness. Lending to the unemployed often depends on the creditworthiness of the guarantor. The guarantor signs a directly enforceable guarantee with the house bank.
If the borrower no longer pays his monthly installments, the principal bank can contact the guarantor. 2. What should borrowers and potential guarantors pay attention to? But that is not the sole benefit for the bailiff. With the guarantee for a foreign credit he loses his creditworthiness. If the guarantor himself wishes to take out a loan during the term of the guarantee, he can no longer be regarded as sufficiently creditworthy.
The guarantee is a contingent liability – even if the guarantor does not have to intervene, this can be done from the bank’s perspective. Therefore, the borrower should discuss in good time with his guarantor whether he really wants to assume these duties and dangers. The guarantor should check again whether a guarantee is in his possession.
For example, if the guarantor wishes to take out a loan in the near future, the risk may be too high. However, a limitation of the warranty period is possible. For example, a guarantee can only be given until the borrower himself has sufficient creditworthiness, eg if he has another job.
It is also possible to limit the warranty to a specific time.
This decision is always dependent on the amount of the loan and the associated risk profile of the respective bank ownership. Even if it is not foreseeable when the debtor’s creditworthiness will improve, the debtor should carefully consider whether to make that commitment.
In principle, the guarantor should weigh all advantages and disadvantages before agreeing to the guarantee. However, it is not always possible – and not necessarily necessary – to secure a loan with a guarantor. Therefore, the prospective borrower should first verify his own creditworthiness. In a second process step, it is examined whether a building plot or a contract on building society savings can be regarded as security.
If it is not absolutely necessary to economically relieve a relative or acquaintance in this way, then a guarantor should refrain from securing a loan. The guarantor and the borrower should exactly compare the pros and cons when choosing a suitable guarantor. The guarantor should be aware that a guarantee can have significant disadvantages for him, eg if he himself wants to apply for a loan.
Conclusion: A loan for the unemployed can have an endurance requirement. Unemployment benefit is not a guaranteed income for banks and there is a risk that the borrower will not find a new job in the foreseeable future. Nevertheless, it is possible to get a loan despite being unemployed. When lending, the amount and duration are crucial.
In addition, however, a credit rating comparison is strongly recommended. If a deposit such. For example, if a home savings contract or a mortgage is out of the question, a guarantor can secure the loan – however, potential guarantors and borrowers should carefully weigh the pros and cons of the guarantee.