If you think you’re going to get thousands of pounds think again – the best you can hope for is a small cash loan of a few hundred pounds or so with repayments structure divided up into small regular instalments to make them affordable, even on a low income from benefits or a pension.
Enter the home credit doorstep loans for unemployed people.
A doorstep loan is simply a small cash loan, often of no more than £500 or so, that’s arranged face to face with a licensed lenders agent in your own home, delivered right to your door and the repayments collected each week by this same agent.
Loans for unemployed are small and interest rates are high but, because the repayments are divided up into weekly amounts and spread out over a term to suit of up to 52 weeks, the weekly repayment is low and affordable.
Whilst a doorstep loan is available to those with a perfect credit rating and working full time they are particularly attractive to those with a poor credit history and on low income. As such, the eligibility criteria is pretty flexible – good or bad credit, arrears, defaults, CCJs, working full time, part time, self employed, retired, unemployed, on benefits … all applications will be considered.
Whilst there is a form of credit check the final decision is made with more of a focus on affordability and ability to comfortable make the repayments moving forward – and this is why they’re particularly attractive to those on low income. Let’s look at a couple of representative examples as at November 2013 (we won’t name the lenders – they are just to give you an idea):
A £200 loan repayable over 32 weeks. 32 weekly payments of £10.00. Rate of interest 97.5% p.a. fixed; Representative 399.7% APR, Total Amount Payable is £320
A £300 loan repayable over 32 weeks at £15 per week, Rate of interest 60% fixed; Representative 399.7%APR, Total Amount Payable is £480. No Deposit.
You get the idea of what we mean – interest is high but when you split it down to a weekly instalment it doesn’t seem much at all.
However, be VERY careful if you’re not working and considering a loan for unemployed – THINK – is it really the right thing, do you really need it, is there another way?
The examples above say it all – the interest rate is high and you’re going to be paying back much more than you borrow and whilst the weekly instalments sound like hardly anything when you think about it on a monthly basis it doesn’t sound anywhere near as low – £50 or £60 a month when you’ve only got an unemployment benefit coming in is quite a chunk of outlay!
If you really do need some extra cash look for another way – close friends or family maybe who may be able to help with a more flexible repayment and no interest perhaps … swallow your pride and ask.
Consider your bank, you may expect them to say no but they may be able come up with some ideas or to advise you – who knows, they may even provide an overdraft facility.
Sell those unwanted or unused possessions that are cluttering up the garage or loft, the clothes that don’t fit, the toys the kids have grown out of, the cds you don’t listen to, the mobile that’s been upgraded, the jewellery you don’t wear anymore … everything has a value and a buyer and it’s so fast, easy and cheap to sell things these days via online auctions, local papers, free ad websites or get yourself up early on a Sunday morning and down to the local car boot sale. You’ll be amazed how easy it is to get a few hundred pounds together and make some space too!
Of course, if you’re really desperate there are charities who may be able to help and, whilst the old crisis loans are no longer in existence, the Government has replaced them with other options such as budgeting loans, welfare or discretionary assistance depending on where you are in the UK. Talk to your local Jobcentre Plus who will be able to point you in the right direction.
Loans for unemployed are available but be very, very careful – they may seem like a quick fix, the weekly repayment may seem totally affordable but is it and is there another way, a more cost effective way, a better way or, do you REALLY need a loan at all?