It is not easy for people with regular income to get a loan with favorable terms. It is even more difficult or not possible to get a loan as unemployed or a loan without proof of work. The restrictivity in bank lending has an obvious reason: people who cannot prove a fixed income could have problems with the repayment of the loan and the bank could stay on their debts.
Less reputable offers
Despite all the bad prospects of getting a loan without proof of employment, it is not impossible to get money. Private lenders borrow money without Credit Bureau query and without proof of income. But these lenders often charge high commissions and deprive the income-less of the last cent, so they are real loan sharks.
Bank loans without proof of employment
Under certain conditions, banks grant a loan without proof of employment. However, these are usually not large sums, often only up to 10,000 USD. The bank usually requires other collateral instead of proof of income, and borrowers who cannot or do not want to show income have to pay higher interest rates.
However, great caution is required when it comes to interest rates: as a potential borrower, you should check whether the offered interest rate is already usury. Accurate research and obtaining many offers from banks or private individuals is essential here. Testimonials posted on Internet forums can be helpful here.
Collateral – the solution
For example, banks require a guarantor as security. A working man as a guarantor for a loan from the housewife’s wife goes through. The most popular type of guarantee is the one that is joint and several: With this, the banks are able to contact the guarantor immediately if the installment is not paid and to keep them harmless. The joint and several guarantee is not dependent on an execution by the main debtor, so it takes effect immediately after the installment arrears. What the bank also accepts as collateral: a home, life insurance or other values such as real estate. In the case of a property, for example, the bank can seize it if the debtor does not pay.
Despite existing ways to get a loan without proof of work, the efforts of the worker who cannot prove an income are crucial. If you have accepted it as a recipient of unemployment benefit, the credit will only work if you make efforts to find a job again. As a beneficiary of Social Welfar, you are at risk of seizing collateral and falling into the debt trap, because the low levels of social benefits are unlikely to make it possible to pay the installments for the loan.