Loans for unemployed

Loans for the unemployed

Usually you will need a steady salary to borrow from mainstream lenders, but there are an increasing number of specialist providers of loans for the unemployed. So being without a job, salary and stability to borrow from high-street banks does not mean you won't get access to cash.

However, there may be separate factors at play making it tricky to get access to credit. For example, you may also suffer from a poor credit history, which can happen if you've missed repayments in the past, or ever had a County Court County Court Judgement (CCJ) or bankruptcy against your name.

Improving your credit history

An option if you're unemployed and seeking a loan, and want to make yourself more appealing to lenders, is to work on improving your credit score. You can do this by, for example, putting your name on the electoral role when your local authority sends you details of this.

Also make sure to space out your applications for credit. Every time you apply for a loan you will leave a 'footprint' on your file - and if you're rejected, this makes the next lender less likely to accept you. When you do get credit, make sure you keep up repayments to gradually rebuild a damaged credit history.

Types of loans you can get

You won't be able to apply for the best buy loans available, so those with the most attractive terms and rates. These are likely to be reserved for borrowers with clean credit histories who are in employment.

However, there are specialist lenders that offer loans to people who seem a greater risk because of their poor credit history, or unemployment. You can compare the rates on offer from these on comparison sites like MoneySuperMarket.

But unfortunately, the greater the risk you are perceived to be by the lender, the more interest you'll pay. It is the folk who need access to credit most who face the highest interest rates from lenders.

Yet while you might face hefty interest charges, taking on a loan will give you the chance to demonstrate that you're a trustworthy borrower, provided you keep up repayments. It can also help tide you over while you are searching for work, but make sure not to overstretch yourself in the meantime. The best option if you are unemployed and without an income however, is not to borrow at all.

Loans for young people

Loans for young people

There are various options when picking a loan. As a student, the loan with the lowest interest rate will be a student loan, which is repayable once you start working.

Aside from this, there are personal loans available from a variety of lenders. However, before picking one, consider how much you really need to borrow and what repayments you can afford to make each month. After all, it's vital that you don't overstretch your finances.

You might, for example, want a loan to buy your first car, or fund a course. By taking a loan from a bank, you'll pay back the amount you've borrowed plus interest on the capital sum. If you don't stick to the repayment plan, you'll face charges, so make sure you can meet the cost.

Remember that the higher the interest the longer it will take you to repay the loan, and the more it will cost you.

Loans for borrowers with a poor credit rating

There is a big difference between 'poor credit' and 'no credit'. However, they both make getting loans with the lowest rates tricky. If you have no credit history behind you because you have never taken out a loan or any form of credit before, you may struggle to get a loan.

Alternatively, if you have a poor credit rating, you may have missed repayments in the past, or even have a County Court Judgement (CCJ) or bankruptcy against your name.

However, neither situation means that lenders will automatically slam the door on you - but it will mean your options are limited. You are likely to face higher interest payments, and access to smaller loans. The best deals are reserved for borrowers with sparkling credit histories, and a history of making reliable repayments.

However, there are lenders that offer 'bad credit loans' to people who seem a greater risk because of their poor credit history. But these come with higher rates and lower limits.

How young people can improve their credit rating

There are simple ways to improve your credit score. These include making sure your name is on the electoral roll when your local authority sends you details of this. If it's not on this, you're unlikely to get any credit.

Also, space out your applications for credit as each will leave a 'footprint' on your file - and if you're rejected, this makes the next lender less likely to accept you. When you do get credit, make sure you keep up repayments to gradually rebuild a tarnished credit history.

Don't despair, as remember that your credit history isn't the only consideration when providers decide to lend you money. They also take into account your job, salary, for example, along with any other assets you might have.

Bridging loans guide

Bridging loans are a short-term funding option. They are used to 'bridge' a gap between a debt coming due - and we're talking primarily about property transactions, here - and the main line of credit becoming available. Or they can simply act as a short-term loan in pressing circumstances.

They can be invaluable in facilitating a property purchase that otherwise would not be possible. But as you might expect with a stop-gap measure, they can be significantly more expensive than a 'normal' loan.

What are bridging loans and how do they work?

Bridging loans are designed to help people complete the purchase of a property before selling their existing home by offering them short-term access to money at a high-rate of interest.

As well as helping home-movers when there is a gap between the sale and completion dates in a chain, this type of loan can also help someone planning to sell-on quickly after renovating a home, or help someone buying at auction.

As banks and building societies have grown more reluctant to lend in the wake of the financial crisis, there has been an influx of bridging lenders into the market.

However, rates can be high and there can be hefty administration fees on top. Indeed, potential borrowers are warned there is a risk of getting ripped off unless you proceed extremely carefully.

Generally speaking, bridging loans are aimed at landlords and amateur property developers, including those purchasing at auction where a mortgage is needed quickly.Who are bridging loans aimed at?

They may also be offered to wealthy or asset-rich borrowers who want straightforward lending on residential properties.

When should you use bridging loans?

Bridging loans can be used for a variety of reasons, including property investment, buy-to-let and development.

However, more recently, there has been a growing trend among borrowers to use bridging loans because high street and private banks are taking longer to process applications for larger home loans.

Some borrowers are also viewing bridging loans as a simple alternative to mainstream lending.

While a bridging loan may sound tempting, if you're thinking about taking one out, you need to think carefully about your exit strategy. This might, for example, involve getting a mainstream mortgage or a buy-to-let mortgage, or selling the property altogether.

The problem is, you may not have any guarantee of being accepted for a mortgage with a mainstream lender after having taken out a bridging loan. This could put you at risk of losing your home.

The FCA is concerned that advisers could be recommending this type of loan too quickly when it may not be the best solution.

Crucially, if you've not used this type of finance before you need to tread carefully, as there are often hidden and hefty legal fees and additional administration fees that are not always made clear.

All of these mean the cost of your bridging loan could soon mount up.

Put simply, bridging loans should not be viewed as an alternative to mainstream lending.

Where can you get a bridging loan?

Bridging lenders can come in all shapes and sizes, ranging from one-man bands up to professional outfits regulated by City watchdog, the Financial Conduct Authority (FCA).

If you want to take out a bridging loan, it's advisable to go to an FCA-regulated broker because they will only recommend a bridge if it is appropriate for you and your particular circumstances

Guide to getting a loan with bad credit

What constitutes bad credit?

If you're considered to have 'bad credit', you may have missed repayments in the past, or even have a County Court Judgement (CCJ) or bankruptcy against your name.

There is a big difference between 'bad credit' and 'no credit' - the latter is when you haven't ever taken on any form of loan and so have no credit history behind you.

However, a dose of bad credit doesn't mean lenders will automatically slam the door on you - but it will mean your options are limited, with higher interest payments than you'd be subject to if you had a squeaky clean credit history, and access to smaller

Is it possible to improve your credit history?

There are simple ways to improve your credit score. These include making sure your name is on the electoral roll when your local authority sends you details of this. If it's not on this, you're unlikely to get any credit.

Also, space out your applications for credit as each will leave a 'footprint' on your file - and if you're rejected, this makes the next lender less likely to accept you. When you do get credit, make sure you keep up repayments to gradually rebuild a tarnished credit history.

Types of loans you won't get with bad credit

You won't be able to apply for the best buy loans available, so those with the most attractive terms and rates. These are likely to be reserved for borrowers with clean credit histories

Types of loans you're likely to be approved for

However, there are lenders that offer 'bad credit loans' to people who seem a greater risk because of their poor credit history - although these tend to come with higher rates and lower limits.

The greater the risk you are perceived to be by the lender, the more interest you will pay and the greater the restrictions you'll face. However, bear in mind that your credit history isn't the only consideration when providers decide to lend you money. They also take into account your job, salary, stability and other assets you might have, such as a property.

Pros and Cons of high interest loans

While you might face hefty interest charges, taking on a high interest loan gives you the chance to rebuild your credit profile by demonstrating that you're a trustworthy borrower. If you are willing to take a disciplined approach to repayments, this route could work for you.

When you are granted a bad credit loan and start paying it back you will be on the path to repairing your credit history.

However, the clear con is the high rate - so think carefully about whether you're willing to accept this and can afford repayments before making an application.

Guide to Home improvement loans

Are you keen for extra space for a growing family, or desperate for a different kitchen - but can't afford to up sticks and move house?

Maybe it's time to look at making home improvements and upgrading your current living environment to suit your needs? - whether it's adding an extension, or simply giving the bathroom a makeover and making it more practical. 

The benefits of home improvements

Making the changes you want could not only make you happier, but also possibly raise the value of your home when you come to sell.

For example, a good extension or loft conversion that increases the floor-space in your home will tend to increase the value too - but whether this will add more than the cost of the works depends on what the market is like when you come to sell.

Or you may opt for improvements such as central heating or double-glazing as general upgrades on your property. Meanwhile, decorating the home can be done reasonably cheaply but still make it a more appealing home for you, and future buyers.

How to fund improvements

The money to make these changes has to come from somewhere, and few of us have substantial savings to dip into to fund these - and anyway, wiping out what savings you do have may not be the wisest route. You could choose to put off making improvements until you've the money to spare, which is an option and will require a disciplined approach and patience.

However, if you urgently need that extra space or can't wait, there are loan providers that offer unsecured personal loans that can be put towards home improvements. Of course, this comes with interest payments, so make sure you can afford the loan before taking one on.

Finding a good tradesman

Once you've decided how you're going to fund the improvements, you'll need to get quotes for the job. So make sure you get at least three to compare and pick the best tradesman for the job.

Ask for quotes rather than estimates, so you're not shocked by the final bill. Also consider the quality of their work, so do some research and check reviews from past customers on sites like www.checkatrade.com.

If available, ask for a list of references and photos of previous jobs if this isn't online, and it's even worth asking previous customers about the quality of their work to make sure a dream makeover doesn't turn into a home disaster.

Best types of loan

A home improvement loan is typically an unsecured personal loan, so it is not secured against an asset you have such as your property, and is generally taken over the short-term - so repaid within 12 up to five years. While some homeowners consider tapping into their property's equity to fund home improvements, taking out a home improvement loan doesn't require a borrower to go down this route.