Unemployment Loan – Unemployed and Need Money Options?
Posted on | October 22, 2009 | No Comments
In a time where the unemployment rate is getting very close to double digits many people are looking for access to money. Getting an unemployment loan is not the easiest financial process but it might be a little bit easier than you think. There is definitely a need for unemployment loans and many financial institutions have realized this. With such a need these companies are sure to provide the service even if it means a little bit more risk.
When getting an unemployment loan you must realize that you are a risk to these companies. By having no steady income you are very likely to default on your loan because you have no way to make payments. Loan companies are taking this risk because they believe in you and they believe in the American economy. Eventually you are going to land on your feet and get a good paying job. When you do get this good paying job you are going to pay off this loan so your credit rating remains solid.
Even though these companies have confidence in you and the economy this does not mean that they are going to give you a low interest rate. The interest rate on an unemployment loan is sure to be very high for the reasons mentioned above about borrowers being risky. It would not be surprising to see an interest rate in the upper twenties or lower thirties for these types of loans. The bad part about this is the fact that interest will build up until you start paying on your loan.
Due to the fact that you are unemployed it is likely that you are not going to have to start paying on these loans until you actually get a job. That might be one week, one month or one year but either way you are going to build up interest the whole time you are unemployed. That means that you could borrow $5000 today and by the time you actually start paying on the loan the loan could end up costing you much more, possibly even $6000 or $7000.
The amount of your unemployment loan might be irrelevant if you need the money badly. With many American struggling so badly they are willing to pay as much in interest as it takes just to get some extra money in their pockets. The problem with this is that you are risking your credit score in the future. Once again, sometimes we just want to sleep at night and having a little bit of extra money would lower our stress levels greatly.
Please check out our unemployment forum where we encourage you to post comments below whether it be a strategy you used to get a job, possible tips or links to those who are unemployed or even a rant about your previous employer and how they laid you off. Anything goes as long as there are no obscenities or direct insults to other posters.
Author: Heather Best
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