Whether or not an individual is in business, some projects such as the purchase of a car, real estate, or work in the house require the use of a loan. And even more when you are unemployed and receive meagre unemployment benefits! In this case, money problems lurk. The personal loan, which does not require proof of use, can boost your project or allow you to make ends meet temporarily. A legitimate question then arises for the applicant: are the personal loan contract and unemployment compatible? Crawfort Singapore answers you.
Return on the personal loan Singapore and its main interests
A personal loan Singapore is a form of consumer credit. It falls into this category of recognition, in the same way as revolving credit or affected credit, among others. But unlike concerned credit (e.g., car loan), the personal loan is not used to finance a specific purchase. The amount granted can be used as it sees fit by the borrower (excluding real estate). This type of credit contract is attractive, especially for an individual having to face expenses related to his job search (driving license, purchase of a vehicle to travel, computer to consult job offers, etc.). Of course, you can also use the personal loan to meet the borrower’s most basic needs (shopping, rent, electricity bills, replacement of household appliances, etc.).
Personal loan: I am unemployed. Can I become a borrower?
Obtaining a Personal loan unemployed is complicated. Why is it complicated? For two obvious reasons that come together:
Nothing guarantees the banking establishment or the credit organisation when you are unemployed. Unemployment benefits do not last forever and are not considered fixed income. Therefore, the operation is risky for the bank: will it get its money back under the contract terms?
When the budget is tight and unforeseen expenses arise, monthly payments can become complicated to meet. However, defaults would plunge the borrower into an even more difficult situation because of the late payment penalties that would apply. And that the banks take into account! Note that the amount of these penalties must be clearly stated on the loan agreement.
So we said complicated but not impossible! Fortunately, professional status is not the only element analysed by the bank to decide whether or not to grant loans. As an unemployed person, are you actively looking for a job? Have you just lost your job, and is it just a temporary situation? On the contrary, have you had long periods of inactivity? Do you have a viable professional project in mind, such as setting up your company? These are all questions that the banker can ask to gauge the applicant’s situation as a whole and decide the fate of his file!
To verify the statements of the particular borrower, the banker will rely on supporting documents that he will be required to provide, such as:
- Your last tax notice;
- Your last payslips;
- Your previous account statements.
The credit institution or the banking establishment will also consider other points, such as living expenses and any guarantees provided. The more positive elements the borrower brings to the table, the more the scales will tip in their favor.
The repurchase of credit can also be considered by the unemployed. As a reminder, the purpose of the buyback is generally to reduce the number of monthly payments by extending the repayment period.
The key points to remember about the personal loan in case of unemployment:
- The two are not necessarily incompatible if the unemployed person has a good record.
- Most of the time, borrower insurance will be required.
- Only the presence of a sufficient guarantee makes it possible to overcome this “obligation.”
The special unemployed credit may not exist, but getting a personal loan or a repurchase of credit while being unemployed remains possible under certain conditions. Now that you are well informed, all you have to do is make a prospect with banks and lenders and compare the rates.