Sunday 3 August 2014

Loans for Unemployed People on Benefits : Secured Loans (IDEA 10 of 20)

This post is Part 10 of the 20 Part Mini Series on Loans for Unemployed People on Benefits. One of the most frequently asked questions on the Millionaires Giving Money Blog is Do Loans for unemployed people on benefits really exist? After responding to a handful of these emails I decided to think of share 20 ideas to help unemployed people take out a loan. These 20 short sweet ideas are suitable for unemployed people, disabled people, and individuals with bad credit history. Before you take out any loan you should remember to check the initial loan amount and the amount you will have to repay. You should always find a loan which has the lowest APR rate so you will save money on interest payments.

IDEA 10: Loans for Unemployed People on Benefits - Secured Loans  

Before you start looking for reliable payday loan companies you should consider other quick loans for people on benefits. Reliable payday loan companies cap the amount you need to repay and the charges are lower compared to conventional pay day loan companies. Before you consider pay day loans you should take a moment to analyse the pros and cons of secured loans. Secured loans have a much lower APR and are spread over a longer period of time. Having a lower APR on a Loan over a longer period of time increases the chances of repaying the loan. Whilst pay day loans might be unsecured the chances of default are higher which is why the interest rates are so high. 

To get started take stock of all the assets you possess. These assets will include your home, vehicle, valuables, jewel, and other items of significant value. Once you've created an inventory of the valuables you can go to specialist loan companies to unlock the value of these assets. Most banks will loan against a property which has equity. You can spread the additional borrowing over the mortgaged terms. Sometimes lenders offer 5 to 25 years loan period to help borrowers repay the money so that chances of default are low. 

Secured loans are risky because your asset will be repossessed if you fail to keep up the repayments. You should always fill out a financial statement so you know exactly how much you have coming in and how much you have coming out. Try to restructure your finances so you have more income and less outgoings. Once you arrive at your final disposable income figure this is the amount you can afford to take out a loan. Try to keep within 50% of your disposable income so you have some breathing space. You should also consider the worst case scenario. If your income were to fall would you be able to service the secured loan? Sometimes you can take out unemployment insurance loans to mitigate the risk of losing your main income stream. 

Secured loans are available to unemployed people on benefits. At first glance reliable payday loan companies might seem appealing however considering the amount of defaults on these loans it might be a better idea to consider secured quick loans for people on benefits. Nowadays most valuables can be used to unlock value in the form of a loan. The most important factor when taking out a secured loan is to look at affordability and consider taking out unemployment insurance.

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