It is a common misconception that not having a job means you can’t get access to any sort of finance or credit and whilst it can be much harder, it doesn’t mean it has to be the end of the road. Finance or credit lenders prefer applicants with a steady and high income as they are more likely to be able to meet every payment. However, as long as applicants can prove they can afford the repayment, car finance can be accessible to other applicants too. It’s worth remembering the decision to offer finance lies with the lender and if you don’t meet their individual criteria, you may be refused. Lenders can’t offer finance to every applicant as it would be unethical to offer finance to someone who can’t afford to pay it back and then get into debt. With this in mind, let’s discuss how loans with no job could work.
Can you get a loan with no income?
If you don’t currently have any form of income, you won’t be able to get a loan or any sort of finance. This is because you have no way of proving you would be able to pay any money back. If you’re in this position, a loan wouldn’t be a good financial decision anyway as you wouldn’t be able to pay it back which can lead to more serious implications.
Could you get a loan with no job?
If you don’t currently have a job and no income, as mentioned above it can be very hard to get a loan. However, you can have no employment, but you receive benefit income in the form of job seekers or universal credit. You can get loans or car finance that accepts benefits as a form of payment. Benefit income can be a steady and expected payment each month which you could use to put towards your monthly loan payments. It can be worth checking if the lender would accept benefits, but many now widely accept applicants who are in receipt of benefits.
Can you get a loan with savings?
You could consider using your savings to put down a deposit for a loan and then using any benefit income to meet the repayments if you are looking for a loan. You can’t usually get a loan with savings alone as it would be pointless to pay off a loan by using your savings.
How to increase your chances of getting a loan when you don’t have a job:
As mentioned above, if you don’t have a job and you don’t have any income, you won’t be able to get a loan. However, if you are currently in receipt of benefits and receive a valid income, you may be considered. However, there are also other factors which can affect your eligibility for loans.
Your credit score is very important when it comes to getting a loan and a low credit score can hold you back. If you’re struggling to get approved for a loan without a job and you have bad credit, it can be a roadblock to getting finance. If your credit is low, you could consider increasing your credit score in the run-up to applying for a loan. Your credit score can also affect the interest rate you are offered, and a higher interest rate can make monthly payments more expensive. When you have a bad credit score you may be offered a higher interest rate as the best rates are usually reserved for people with better credit.
Find a specialist lender.
When you have adverse credit or are applying when you have no job, you may not be suitable for mainstream lenders. It can be worth finding a specialist lender who would be better suited to your situation and would consider applicants who don’t meet the mainstream criteria.
Save for a deposit.
It is understandable that saving for a deposit when you have low income can be hard but having some money to put down at the start of the agreement can be beneficial. A deposit contribution at the start of the agreement can help to secure the deal and also lower the loan amount, making the monthly payments smaller and the financing more affordable.