If you are out of work then you might think that it is impossible to borrow money. It can be very difficult, particularly for large loans because a lender will want to see that you have a good source of income in order to be able to have enough money to make the repayments. There are a few ways that you may be able to borrow money though.
Before you do borrow though, you need to think really hard about whether this is a sensible idea for you. You need to consider that you will have to make the repayments on the loan. They may seem reasonable now, but you will have to make them for the duration of the loan or else you will have to pay extra charges. You will have to be careful as well because if the base rate increases, then the interest rate on the loan is likely to go up and this will mean that each repayment will be higher. You will have to be able to find the money to be able to cope with paying for the extra payments. This can be difficult for anyone but if you do not have very much money coming in, it can be even more difficult and so it is worth thinking about how you would cope if this should happen. It is always wise to imagine the worst case scenario to see whether you would be able to cope in the future as well as considering the current time and whether you would be able to manage now.
If you apply for a loan and get rejected, it can be tempting to keep applying until you get accepted. However, this can have a negative effect as it will appear on your credit record and potential lenders will see that you are doing this and think that you are desperate for money, which could put them off lending to you. There are other things that you should do first before reapplying.
Firstly think about whether you are applying for the right type of loan. Consider how much money you want and then what types of loans are available to give you that money. You may find that there are more options than you knew about and this could mean that you will have different types of loans to consider. You may find that you will be more likely to be lent money for a credit card, for example than for a personal loan. Of course, you need to be sensible and make sure that you get a loan for just the amount of money that you need and only spend what you have to or else things could easily get out of control.
There are some short term loans where credit checks are not necessary and these tend to be the ones that most people are able to get even if they are unemployed or have a poor credit record. However, these can be extremely expensive and if you do not pay them back on time you can end up paying a lot more than you expected to.
It could be better to try to borrow money from friends and family. Although there can be problems with this as it can cause relationship problem if you do not pay it back when expected, it can be a lot cheaper and more flexible. Just be careful to choose carefully who you borrow from and make sure that you have a written agreement as to when the repayments will be made and how much they will be. If you want to pay them back extra by way of interest or they ask for extra, make sure that you agree this as well. As long as you stick to the agreement, there should be no reason for you to fall out over the loan and things should work out really well for everyone.
It can be hard to spend enough time thinking about borrowing money before doing so. You may be desperate and just want to get your hands on money as soon as possible and not think about the consequences of borrowing. Take time to consider whether you really need the money, look at all places that you can borrow from and make sure that you are confident that you will be able to manage the repayments before you borrow anything. Although it will be nice to be positive and assume that you will find a job soon. You never know whether the interest rates will go up and whether you will be able to make the repayments. If there is a risk that you will not be able to make the payments then it is worth trying to find an alternative way to manage without borrowing the money.