Almost all banks reject loans for the unemployed without additional collateral. This decision is understandable, because loan repayment is hardly possible through unemployment benefits. In individual cases, the house bank grants a short loan with a term until the end of the unemployment benefit I benefit, since the performance of the employment office is calculated on the basis of previously earned earnings and can in a few cases be as high as an average income from work.
Loans without proof of salary
Unemployed people notice advertising for loans without proof of salary immediately. The waiver of the proof of salary serves to process the loan application faster, but the lenders limit the maximum amount of their loans. At the same time, they charge higher interest rates than conventional bank loans because they have to compensate for the greater risk of loss arising from the submission of proof of salary. Nevertheless, customers cannot simply take out a loan without a job and without proof of salary, because the lender asks about the current employment relationship and current income.
Incorrect information in the loan application is not noticed before the payment, but it can have criminal consequences if the unemployed later does not repay the loan as agreed. Installment payments at larger mail order companies and some stationary shops, on the other hand, are also available without a job and without false information, since with small amounts only a positive Credit Bureau request and proof of an existing bank account is required.
Loans with additional collateral
Ideally, anyone wanting to take out a loan without a job provides additional collateral. If the unemployed have taken out life insurance, they can in principle lend it. The most common form of loan security is to provide a surety. If the guarantor has a regular and sufficiently high income or assets, the bank grants the unemployed the requested loan. Another option for taking out a loan despite unemployment is to deposit an item with the pawnbroker. It is a prerequisite, of course, that the unemployed borrower has items accepted as pledges.
Alternative ways of borrowing
With good chances, a loan can be taken out without a job via private loan brokerage platforms. A licensed bank is formally responsible for the relevant platforms, but the actual lending decisions are made by private lenders. These mainly decide whether they want to support the purpose stated in the credit request. Here unemployed borrowers have a good chance, as unemployment often triggers pity rather than fear of loan defaults among private individuals.
The unemployed should pay attention to long terms, as these are associated with low monthly rates. In some cases, it is not necessary to take out an interest-bearing loan for the unemployed. The job center grants recipients of unemployment benefit II interest-free loans with reasonably long terms for essential purchases. The employment agency can also approve a loan for the costs associated with starting work again when receiving unemployment benefit I.