Unemployment brings along with it numerous other personal problems. The whole family is affected by the unemployment. Family finances go haywire and it becomes difficult to do any future planning. It tends to be associated with poverty and indebtedness. And if there are contingencies then it can compound the problems for the unemployed person. It is said that when your fate closes one door then it opens another. Cash loans for the unemployed represent the other door.
What is a cash loan for unemployed?
A cash loans for unemployed is a one of its kind financial product that provides instant cash loans for the jobless individuals to meet the contingencies at the earliest.
It is a very useful financial option for the unemployed considering his/her loan needs and time by which he/she needs it.
Why are the lenders giving such loans?
An unemployed person, because of his poor financial condition and absence of a stable source of income is considered risky when it comes to offering such loans. The main concern is about the borrower’s ability to repay the loan in full. Since the borrower is already struggling in managing his finances he/she is seen as someone with less financial ability. It is in common knowledge that the interest rates and the risk associated with a portfolio are inversely proportional. Lenders charge a high interest rate on these kind of loans and that is precisely the reason why these loans are so popular among the lenders.
More about cash loans…
Cash loans do not discriminate on the basis of status of employment as is perceived by some. The high interest rate takes care of the risk associated with lending to an unemployed person.
These type loans have gained a negative standing for being very expensive. The high interest rates and the high late fees have contributed to this. The borrowers should analyse the advantages that cash loans have and put them in perspective while looking at the cash loans. So the disadvantages should not be looked at in isolation.
Advantages of cash loans for the unemployed
Speed: Cash loans make the funds available to the unemployed very fast. Since the borrowers most of the time need the money urgently and they have to meet contingencies this helps them a lot.
Loan approval irrespective of the credit history: Lenders give loans to the borrowers irrespective of their credit history. This ensures that the borrowers get a loan even if their credit report shows defaults.
The amount of money that the cash loans for unemployed give access to is smaller. In the general sense of the term, a cash loan is used as a payday loan by people who are employed, as an advance on their next paycheque. In case of the unemployed borrowers, since there is no stable source of income on which to base the cash loans for unemployed, the borrowers are allowed to repay the loan after they hope to regain employment.
Cash loans for unemployed, as mentioned above carry a higher interest rate. Since it is a short term loan, being charged a high rate of interest is no rarity. Sometimes the interest rates are pushed further northwards citing the unemployment factor. So it would be wise on the part of the borrower to choose a lender who offers cash loan for unemployed at standard rates.
A last word:
The borrowers should try to follow a standard selection procedure and weigh the various loan options very rationally. Since the time taken by the lenders to approve the loans is crucial the borrowers should try to survey the time taken by the lenders to process a loan. There could be a tradeoff between the time taken to process a loan and the quality of service from the lenders.