Everything You Need to Know About Financial Aid When Unemployed
The impact of the coronavirus epidemic has been devastating. 10.9 million Americans are still unemployed as of October, and the job market shows no sign of recovering any time soon. In fact, nobody is sure when that might happen.
With so many people robbed of their livelihoods, it is no surprise that applications for unemployment benefits have skyrocketed this year. This is a necessity for many just to put food on the table. However, many people are also turning to personal loans.
Government grants won’t meet all your needs, and if you think a personal loan is the best way to go, this article is going to take you to step by step through everything you need to apply for a loan in this trying time.
Do you qualify for loans if you’re unemployed?
Most personal loans don’t require assets or collateral from your end, so that’s good news if you’re unemployed. However, you do need to provide proof of some other things. Let’s take a look at them.
Alternate Income Channels
Taking a loan at also means agreeing to repay it. Therefore, you need to have the means to repay it. Being unemployed means you can’t rely on your paycheck to do this. Don’t worry, though. There are ways around this.
Depending on the state, you can show unemployment benefits, interest from pension funds and investments, as well as pay from part-time or freelance work as an alternate source of income. In addition, if your spouse or parent has an income, you can co-sign the application with them and show their income.
Solid Credit Score
Mainly because you don’t have a steady income, lenders will look at your credit history to see how likely it is that their money will be repaid. The better your score, the better your chances. Of course, your credit score by itself won’t offset the lack of an income, but it will go a long way towards building trust.
How to Pick the Loan for You
Let’s describe the major steps.
Look at Options
One of the best things you can do for yourself when on the lookout for loans is to consider all your options. There are a lot of places that can give you credit. Take your time to make a note of the offer. The rate of interest, the duration, etc. Compare them all and choose the one that best suits your needs.
Study the Terms and Conditions
The fine print may seem innocuous, but it holds the key to every problem. Chief among them is the origination fee, which is an amount you need to pay to the lender to close the loan. This information, and more, is included in the terms and conditions, so comb through this section very, very carefully. The more you know, the better.
Times are hard, but no matter what kind of financial aid you choose to take, do as much research you can. This is paramount. Especially because times are hard, you need to know everything you can before you can invest in anything safely.
Hopefully, this article helped you get started with that process. Stay safe and remember, you’ll pull through.