Today, not only those who are registered with the labor exchange are considered unemployed, but also students, self-employed people, individual entrepreneurs, and people with “black”, that is, unofficial, wages. As a rule, this does not cause much trouble, but everything changes when it comes to a loan. Banks are reluctant to issue loans to this category of borrowers and are in no hurry to offer favorable terms. In the article, we explain why this happens and how to get a loan without a certificate of income.
Why is it difficult to get a loan when you are unemployed
The first thing banks and credit institutions pay attention to is the presence of a stable income. Moreover, it must not only be presented but also confirmed. To do this, bank employees will check where exactly you work, what salary you receive, and whether there is a risk of dismissal in the foreseeable future. This helps to ensure the reliability of the client and guarantee the timeliness of payments. By issuing a loan to a person without official earnings, the bank takes on increased risks. Therefore, even if the application is approved, the interest rate on it will be higher, the amount will be less, and you may be asked to make a down payment or involve a co-borrower. However, there are still ways to get a loan without guarantors and certificates. We will talk about them below.
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Method No. 1. Microloans
A small amount can be obtained from microfinance organizations or MFOs. They are willing to issue loans to any category of borrowers. Neither employment, age, or credit history play almost no role. Loan approval is carried out only by passport, and the issuance of money takes a maximum of 10 minutes. This is a working option if funds are needed right here and now, but there are also disadvantages:
- very high rate. MFIs charge 1-2% daily, so it can exceed the bank rate by tens of times;
- questionable conditions. You may be required to pay a commission of 10-20% of the loan amount or be forced to take out unfavorable insurance;
- lack of gradual repayment. In most MFIs, to repay the loan, you will have to pay the entire amount at once. At the same time, penalties for each day of delay can reach 10% of the total amount.
In total, it turns out that microloans, or, as they are also called, express loans, are less profitable in comparison with regular consumer loans, and in case of delays, they are also unprofitable.
Method #2. Credit cards
This is a convenient and fast way to get money for regular expenses or large purchases. Income verification is usually not required, and some banks issue credit cards even to 18-year-olds or unemployed clients. Of course, this method has its nuances that need to be taken into account:
- service fee. This will be charged regardless of whether you use the card or not;
- small limit of funds. In most banks, it can be increased by repaying the debt on time over and over again, but this will take time;
- cash withdrawal fee. This makes it more profitable to use a credit card for online purchases.
If you analyze all the conditions, it turns out that those who urgently need a large sum of cash are better off looking for another method of lending.
Method #3. Credit brokers
These are the intermediary companies that work directly with many banks. They take on the entire procedure, from finding good conditions to submitting an application and completing the transaction. This is convenient, since you may not have the time or patience to independently study dozens of offers and find the most profitable one. Brokerage organizations will do everything for you and ensure that the application is approved. Of course, you will have to pay them a commission for such useful mediation. As a rule, this is 1-10% of the loan amount. However, contacting brokers does not guarantee anything. You only get a chance to take out a loan on more or less acceptable terms.
Method No. 4. Loan secured by property
A reliable way to prove your solvency to the bank is to provide solid collateral. The collateral may be a car or land, but more often it is real estate (apartment or apartments). Having collateral greatly reduces the risk of non-repayment, so banks offer very favorable terms for such programs. The chances of approval are high even with a less-than-ideal credit history, and part of the money can be received on the day of application. Other important advantages of loans secured by property include:
- large amounts. For example, within the framework of a consumer loan without collateral, you can count on only 1.5-3 million dollars. But with collateral, the amount can be 30 million and higher;
- long terms. A loan secured by real estate can be issued for a term of up to 25 years. This increases the chances of a comfortable repayment;
- quick and easy registration. Application approval takes 1 day, and to start the procedure, 2 documents are enough: a passport and a title deed for the property.
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The funds received can be used for any purpose, including paying off other obligations. Of course, there is a risk that in case of non-payment, the bank will take the collateral property to pay off the debt. But this is practiced only with malicious defaulters, which means that if you are confident in your solvency, there is no reason to refuse such favorable conditions.
To learn more about how to get a loan without a certificate of income, contact our specialists. You can pre-calculate the payment amount and see the list of documents for registration here. If you need advice on the current credit line, please contact our specialists by free phone (713) 446-7510.
