On no account will you be able to borrow money without a job. Having an income source is a must to prove your repayment capacity. No lender would ever approbate your loan application unless you have some regular income to pay back the debt. Loans that lenders provide are not charity. They tend to receive their money back on the due date, and therefore, it is a must to have some income to prove your repayment capacity.
Does that mean you will not be able to qualify for a loan if you have no job? What if you lose your job and you are caught unawares by some unexpected expenses? Emergencies can pop up at any time, whether or not you are employed. What if you do not have enough savings to meet unforeseen expenses? The good news is that there is a probability of taking out urgent loans for the unemployed in Ireland. How would you be able to take out these loans when you have already lost your job?
Apply for unemployment benefits
First off, you should apply for unemployment benefits. As soon as you lose your job, the first thing that you need to do is to apply for these benefits. You will need to meet the eligibility criteria to get approval for these benefits. Once you start getting unemployment benefits, you can consider it your income.
You will be able to borrow money that you can easily pay back from benefits. There is no doubt that you would not be able to borrow a larger sum of money. Do not forget that unemployed loans are small loans and are required to be discharged in one fell swoop. Your benefits must be able to pay back the debt along with the interest without any hassle.
Even though you have some savings, you cannot use them as your income. A lender would make the lending decision based on the amount of unemployment benefits. When a loan is taken out using unemployment benefits, it is called an unemployed loan. As these loans charge high interest rates, it is suggested that you should never borrow a large amount of money.
Otherwise, you will struggle to repay your debt, and eventually you will fall behind on the debt payment. At the time of taking out unemployment loans, you should carefully examine your repayment capacity.
Your chances of getting approval for these loans are quite high when you are receiving other benefits too, such as:
- Universal credit
- Personal independence payment
- Disability living allowance
- Fostering allowance
- Child benefits
- Child and working tax credit
- Employment and support allowance
- Industrial injuries disablement benefit
However, not all kinds of benefits will be regarded as your income. Here are some benefits that lenders do not consider when evaluating your income:
- Jobseeker’s allowance
- Housing benefit
- Income support
- Pension credits
While unemployment and other benefits help you get a loan approved despite having no job, you must have a strong repayment capacity. If you do not have enough money to discharge your debt on time, you should try to avoid borrowing money.
Have a side gig
Benefits are not enough to be able to prove your repaying capacity. You will have to pay interest on top of what you borrow. Chances are, you are left with little money to meet your essential expenses. If that happens, you will end up borrowing again to meet your essential expenses. Eventually, you will fall into an abyss of debt. Once you get trapped in an ongoing cycle of debt, you will struggle to get out of it. Therefore, it is crucial that you have a side gig.
A side gig refers to a job that helps you earn supplemental income. This includes a wide range of jobs such as babysitting, pet sitting, Uber driving, walking dogs, house cleaning, and the like. In addition, you can consider finding a job as a freelancer. There are various freelance platforms that you can join to get projects.
This supplement income increases your chances of getting approval for personal loans in Ireland without a job. This is because you can add your supplement income along with benefits to demonstrate that you have a strong repayment capacity.
Arrange a guarantor
In order to improve your chances of getting approval for a personal loan, you should arrange a guarantor. This is especially aimed at subprime borrowers. If your credit rating is not up to scratch, you will indeed find it challenging to apply for unemployed loans. Your lender will find you a risky borrower.
In order to mitigate the default risk, you should arrange a guarantor with a good credit history. Involving a guarantor as a third party in a contract will reduce the risk of default, as your lender can call on them in case you fail to pay off.
A guarantor is responsible for discharging the full debt if a borrowers fail to settle it on time. The guarantor you choose must have a good credit rating. Bear in mind that your guarantor will also lose their credit points if you make a default, even if they settle the whole debt. Therefore, most people feel disinclined to act as a guarantor.
Nobody would intend to pay off debt that they never borrowed, nor do they want to risk their borrowing capacity of getting lower interest rates down the line by impairing their credit score.
The bottom line
Undoubtedly, you can qualify for a loan without a job in Ireland, but you must have unemployment benefits or a supplemental income in order to prove your repayment capacity. Make sure that you are borrowing money that you can afford to pay back. Borrowing more than your repayment capacity will throw you into an ongoing cycle of debt.
If your credit score is less than perfect and is getting in the way of obtaining a loan, you should arrange a guarantor with a good credit history. They can help increase your chances of getting approval.
