How to get a loan with low credit scores and no job in the UK?

As you read via this, you may consider, “Can I get a job despite being unemployed?” Yes, you may get one by following a few conditions. It is because getting a loan with bad credit and no job requires due diligence. You may not want to impact your finances further by entering such a situation. Nevertheless, if you are in urgent necessity of funds, the blog may help. It lists the possibilities of qualifying for a loan without specific earnings and a bad credit history.  

When will I be considered “unemployed” by loan providers?  

Every loan provider has a standard that deems one as unsuitable for a personal loan. Thus, compare personal loans and understand the criteria before applying. It will help you filter out the most personalised and affordable quotes in the UK.  In this case, you may be considered unemployed if:  

1. You lack alternative income 

You need some sort of income to get a loan. It could be part-time earnings, passive income, or another source. It should be apart from the benefits that you get from the government as an unemployed person. Otherwise, you may be considered unemployed as experts struggle to analyse your loan affordability in the absence of income.  

2. Too much pending debt with no earnings 

If your profile reveals debts like CCJ, bankruptcy, payday loans, and credit cards, with no basic income to clear these, you may be deemed unfit for the next loan. Here, you may be instructed to furnish additional proof to qualify.  

3. Bad credit score with falling finances 

Individuals with bad credit issues – missed payments, high credit utilisation ratio, limited cash flexibility and income struggle to qualify. Individuals with no credit history and income are also considered unemployed and unfit for an individual loan.  

6 Strategies to get a loan with bad credit as an unemployed 

So, if you meet the above conditions, you may be considered unemployed. Individuals with no job struggle to clear their bills and end up in arrears. However, you cannot stop unexpected events from affecting your finances.  

What if you need to pay an urgent bill, which may lead to serious action from the creditor? What would you do in such situations? Of course, you will search for instant cash options for the unemployed with bad credit. So, here is how you may increase your chances of qualifying for the loan:  

1. Identify finances and the amount needed 

The first thing would be to know your finances and cash needs deeply. It will help you ensure clarity while comparing the options. Check how much you can afford to refund, given the minimal income. If you struggle to determine that, use a loan calculator. It will help you determine the approximate amount you may pay on the loan. Accordingly, you may choose an affordable amount. You may allow fast if you prefer a lower one, given a specific income source.  

2. Pay some debts before applying  

Yes, it could be challenging for you to settle some dues as an unemployed. However, if you share some flexibility, do it. If not big, you can pay off small dues like- payday, overdrafts, and other unsecured loans.  

It will boost your credit score a little and optimise your credit utilisation rate. It thus makes you a little more reliable in the loan repayment aspect. However, do it only if paying the debts does not affect your basic living expenses.  

3. Identify a “valid income source” to qualify 

Your earning evidence plays a crucial role in the case of unemployment and a bad credit history. It may seem contrasting, but you must have some income to get a loan individually. Therefore, check the basic guidelines regarding valid income sources.  

It will help you know whether yours makes it to the list. Generally, earning from illegal sources, like money from selling unregulated property, gambling, and other illegal sources, is not acceptable as a legal source of income.  

Instead, the following income types may qualify as a valid income source:  

• Part-time income with invoice or payment proof 

• Income from benefits slips if seeking loans specifically on benefits 

• Passive earnings- dividends, income from the rent of a valid property 

• Pension 

4. Get an updated credit report  

It is important to have a recent credit report before applying for a loan. It reveals the changes in your credit report after paying off the debts. You can see the credit improvement, more credit flexibility and affordability.  

If you have a new job letter, this may also improve the prospect of getting a loan.   It is because the letter reveals that you can repay the dues with your first salary. Thus, this information also optimises your credit score.  

5. Apply with a “guarantor” 

A guarantor is someone known who may help you qualify for a loan if you cannot. He must hold a regular income, a good credit score and balanced finances. He could be your father, mother, brother, sister, or even your spouse.  

The only thing is that his financial condition should be better than yours to support the payments. He enters the situation if you cannot pay at all. Like here, you may struggle to clear the dues as an unemployed person. Here, a guarantor loan may help you. He must pay on your behalf until the loan repayment term.  

A guarantor not only helps you qualify but also gets a low credit score loan. Yes, a guarantor acting as a payment security on the loan reduces the risk for the loan provider. He may willingly approve the application without further difficulties.   

6. Check secured loans for instant approval 

Asset-based loans are a financial facility that helps one qualify for a loan with bad credit by providing an asset that you own. It helps you get a higher amount despite a low credit rating and falling finances. However, if you fail to repay the dues, you may lose your assets. Always determine the possibilities of getting a secured loan for bad credit as an unemployed individual. Knowing the risks will help you decide what is right for your circumstances.  

Bottom-line 

These are some of the best ways to get a loan as an unemployed person with bad credit. No responsible provider lends to an individual with no basic earnings. It affects the borrower’s and the loan company’s financial interests. However, you may qualify with a part-time income source apart from the government benefits you receive. It helps you get a small amount to counter emergencies.