Is it then totally impossible to obtain a loan when one is unemployed? No, because most banks will consider other parameters in addition to your professional status. If your unemployment benefit is high, prove that it is a temporary situation or that you have substantial savings, your application will not automatically be rejected. Each bank has its own policy of granting, but it is certain that you will be able to borrow under terms and conditions less favorable than being employed.
This is how the bank can grant you a loan by being unemployed if you have a person who is a guarantor and has no history of “bad” credit. It is important that this guarantor has sufficient income for his personal expenses but also to take over the credit responsibilities of the borrower if this proves necessary. In addition, you will have a better chance of getting a credit if you own a property. You can put your property in mortgage so that the bank has a guarantee and gives you the loan more easily.
Types of loan for the unemployed
Startup loan for the unemployed
If you want to start your own business by being unemployed, you can apply for an unemployed loan from the EuroFunding. This loan is available for unemployed full-time unemployed for at least 3 months or for beneficiaries of an integration allowance or social assistance. You can borrow up to € 30,000 with a reduced rate, depending on the maturity (4.25% over 5 years and 4.50% over 7 and 10 years).
The social loan has been put in place to help people with a minimum income in managing their unstable financial situation. For example, if you need to furnish your emergency home, you can contact the Public Center for Social Action. You will pay a minimal interest rate (currently 2%) on a loan of up to 5 years and you receive assistance with the application process.
In short, it is quite possible to get a (small) loan even unemployed. It is important to ask yourself if it is really necessary to spend this money in your current situation. The monthly amount you have to live will decrease if you take a loan. Always carefully check the bank’s terms and the annual percentage rate of charge (APR) and not just the interest rate. The APRC includes all costs (administrative fees, administrative costs, etc.), in addition to the interest rate.