loans for bad credit no guarantor no fees no brokers
  • January 4, 2023
  • Adrina Martinez

Payday loans are also known as a cash advance. These are small loans that people take out during emergencies. If you need money and your savings have fallen short of cash, you can take out these loans.

Payday loans are aimed at funding emergencies only, not planned expenses, even though your savings have fallen short of them. The repayment length of these loans is not more than 14 days. You will be required to pay back the debt within 14 days.

Most of the lenders advertise payday loans for the unemployed. It seems to be counter-intuitive because you need to have a full-time job to qualify for a loan. No lender will lend you money if you do not have a repaying capacity.

If this is a true scenario, does that mean it is just an outlandish claim?

No, not at all; payday loans for the unemployed do exist. A lender checks your repaying capacity before signing off on a loan. In order to prove your repaying capacity, you do not necessarily have to have a full-time job.

If you have a part-time job, a contract-based job, or freelance work, you can qualify for these loans. There are many people who rely on rent or divided income after losing a full-time job that can be used as their income to qualify for a payday loan even if they are out of work.

Payday loans for the unemployed are expensive

It is important to note that these loans are quite expensive. These loans are actually no credit check loans and are famous among those borrowers who do not want to have a credit score check. If you have a bad credit rating and do not want to have a lender run credit inquiries, these loans are the best option.

However, it increases the risk of a lender, and that is why they charge higher interest rates. Now you are out of work, so the risk doubles. Therefore, it is likely that you will end up paying more money as interest.

Payday loans do not seem to be expensive as you are to pay off the whole of the debt outright. Once you have cleared all dues, you are absolutely free from debt, but the problem arises when you make a default.

Once you fall behind the payment, you will end up rolling over the loan. This will keep accruing interest. If you roll over for a full year, you will likely end up paying 500% as interest. In order to prevent yourself from a debt cycle, you should try to borrow money only when you are sure that you can repay the debt.

Does it make sense to take out these loans?

Though you can qualify for payday loans for unemployed and bad credit, applying for these loans only when you need them is always suggested. You should use these loans only when you have an emergency. Do not use them for funding a gap for a planned expense like a vacation.

Financial experts recommend that you treat these loans as a last resort. As you know, you can be caught unawares by emergencies at any time, so it makes sense to brace yourself for them. Here is how you can do so:

  • Borrow from friends and family

It is quite embarrassing to ask your family or friends for money, but it could be a better funding alternative than a payday loan for the unemployed as you do not have to repay the money with interest.

Make sure that you will certainly pay them back the money. If possible, you should make an agreement with them that discusses how you will pay back the debt. This ensures that you are serious about paying back the debt to them.

They will more likely trust you when you have a repayment plan. If you fail to repay the money, it may strain your relationship with them. Make sure you will not fall behind on the payment if you borrow from your family and friends.

  • Use bad credit loans

Bad credit is often a snag to qualify for a loan at the best interest rates. Further, when you take out loans for bad credit with no guarantor, you lose your credit points because of credit inquiries.

When hard inquiries are made on your credit report, you lose your score by 5 points, but these loans are more manageable than payday loans for the unemployed. This is because they carry lower interest rates.

One of the reasons for these loans to be more affordable is that a lender has analysed your past payment records by perusing your credit report. Another reason is that lenders usually focus on the latest defaults.

If your credit report does not have the latest default, a lender will be more likely to lend you money at the most competitive interest rates. Not all lenders do follow this approach, so it is crucial to do proper research before applying for these loans to any lender.

You can go to their websites to learn about their interest rates. If no information is given there, you can call them to learn about them. However, a lender may not be possible to give you those details as it depends on your credit rating and repaying capacity.

But you can get some information about the fee structure. You can also check online sites to compare interest rates between lenders.

The bottom line

Payday loans for the unemployed could be expensive. Therefore, it is suggested that you take out these loans only when you are able to pay them off on time. If you need money for unforeseen expenses and you are not sure about your repaying capacity, try to borrow money from friends or family or look for a cheaper alternative.

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