Can I Get a Payday Loan Without A Job?

Getting a loan even without a job is highly overrated. It's very sad that many people on the Internet are taking advantage of the fact that unemployed borrowers are desperate to find a source of money, even in the times they are in between jobs. One common misconception is that people are supposedly able to get payday loans without a job. The following article is going dispel this myth and root out the real thing behind it.

Getting Payday Loans

First of all, let's talk about what a payday loan is. This will help us better understand how it works and why it can't be given to a person without employment. A payday loan is a type of loan that is not built on trust. Instead, this loan is built on a paycheck. The paycheck is used to make a promise that the debt will be repaid on a timely manner. For that reason, nearly ninety percent of all payday loans go out smoothly, whereas in other types of loan, the number of people who are able to repay the debt fully and on time are well below half that.

In a payday loan, the absence of a proof of income disqualifies a person from getting approved. Without this required assurance, there is no point for the lender to take that risk. Come to think of it, the reason why it's called payday loan is because the borrower uses his payday to promise the debt will be paid back. Without that, there's nothing. And with nothing, there's no such thing as payday loan for unemployed people.

Unemployment Loan

That, however, doesn't mean people who are currently unemployed are totally without options. There are options for people who don't have jobs at the moment. One of which is an unemployment loan. This is the type of loan that is specifically built for people without work. A lot of us just get confused between the two and misinterpret the two things are one and the same. Payday loans and unemployment loans are very different. For one, unemployment loans have higher interest rates, as there is very little assurance for the lender that the debt will be paid back. The time to wait for approval may also take longer. The good side is that the amount of money is much higher.

An unemployment loan can be one of two things: a secured loan and an unsecured loan. The first requires that the borrower presents collateral for the loan, while the other does not. The collateral is often a house or a car, or some other huge financial investment. In some cases where the principal amount of money being borrowed is small, the collateral may just be digital devices, gadgets such as cellphones, or jewelries.

The unsecured loans have the highest interest rates, as the lenders are at a total loss of surety when it comes to being paid back. In turn, they may take aggressive measures to extract payment. The borrower can't default on his loan like in secured unemployment loans. If he does not pay, the lender has the right to bring the borrower to court, which will then lead to more financial setbacks for the borrower.

It is true that one can get a loan without a job. But to get a loan without a job, there would be some risks; a borrower must know how to manage those risks in order to succeed in this.