4 Types Of Loans For The Unemployed In The UK

Things can get tough for an unemployed person whenever he is need of money and don’t have any savings. A loan is the obvious way of managing some cash, but not every loan option is created equal.

In the UK, there are many loan options for the unemployed. Selecting a loan option with soft terms and conditions and minimum interest rates can be hard to find, and needs some awareness and study. Here are some options for the unemployed people in the UK.

1. Secured Loans
Secured loans are a common loan option for the unemployed living in the UK. In secure loan option, you are required to offer your asset, property or car as a security to the loan provider.
It is clearly written in the terms and conditions that if you fail to pay off the debt and interests at the specified time, the provider holds right to gain control over the asset.

2. Guarantor Loans
This loan is somewhat similar to Secured Loan but here, a second person takes guarantee and responsibility to pay off the debt. This person could be one from your family or a friend.

In the guarantor loan, the guarantor has to pay the interest or loan if you fail to do so. Trust is the most significant aspect here, and you should know the implications your guarantor can face in case of your failure to pay debt.
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3. Credit Union
This is usually a nonprofit organization whose members are joined by mutual trust and bond. Credit unions can be made based on their occupation or location. In credit union, all members gather money and provide it as a loan to other members.

They have a relaxed and favorable interest rate and payment options. Credit unions are common in the UK, and it’s ideal for a temporarily unemployed person

4. Government Support Loans
UK Government provides interest free and long term loans to their unemployed citizens. For this support, they need to be eligible and fulfill some criteria.

The government provides a clear system, and people are entitled to different benefits based on specific criteria. The UK government mostly provides budgeting loans and one of the top qualifier for this loan is that it needs to be for a domestic purpose e.g. paying the house rent.

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