Loans For The Unemployed Guide

How The Credit Card Act Affects Loans For The Unemployed

Bill — Tue, 09 Mar 2010 07:00:38 +0000

The new credit card act that goes into effect this year has some effects on loans for the unemployed. Actually, that should be stated differently. The high rate of unemployment combined with the new credit card act, will have an impact on individuals who are unemployed and are attempting to get a loan. The new act itself has many new benefits for consumers, but the high rate of unemployment may overshadow those benefits.

One of the more attractive benefits of the new credit card act is, you get to see how long it would actually take you to pay off the balance, if you only pay the minimum monthly payment. It’s almost comical when you finally see your statement. A $3000 balance, for example, might show something ridiculous like 16 years to pay off, if you only pay the minimum. Conveniently, they also show you how long it would take if you decided to make just $10 or $20 over the minimum every month. It’s surprising. Something that was 16 years, is now whittled down to between 3 and 5 years.

Other features of the new act include a 45 notice of any changes in terms. This means that if the credit card company decides to change your APR, they have to notify you at least 45 days in advance. If you do not agree with the terms, then you can close the account.

The American Bankers Association stated that the high rate of unemployment, along with the new credit card act, will make it tougher for consumers to obtain credit. In addition to this, interest rates may rise, due to the increased risk associated with consumers inability to pay credit card bills. The credit card not only raise rates for people who are unemployed. They will raise the rates for everyone as well.

Does not seem quite fair. You can not find a job to pay all of your bills. Then some of your bills actually get worse, because you can not find a job. It’s kind of like the bank charging you money, for not having money.

As you can see, the rate of unemployment can actually have an effect on interest rates, nationwide. There are two things that need to happen, in order to remedy both unemployment and higher interest rates.

Jobs. Jobs. Jobs. As soon as the current administration is able to lower the unemployment rate (and get everyone back to work), the financial institutions will (hopefully) have greater faith in consumers ability to pay loans and the end result will be lower interest rates for all.

The other item that needs attention has really been addressed by the current credit card act. Consumers have long had many complaints about credit card companies and their practices and finally some action has been taken to protect consumers.

The credit card act has had an effect on loans for the unemployed. But in all reality, interest rates have reacted to the high rate of unemployment as well. Although the act has some overall benefit for consumers, the high rate of unemployment seems like it will be overshadowed by lenders who are less willing to provide credit. In additon to this, current borrowers may have higher interst rates to contend with.

European Union To Provide Loans For the Unemployed

Bill — Mon, 08 Mar 2010 19:12:34 +0000

Good news regarding loans for the unemployed. The European Union Employment and the Social Affairs Ministry have agreed to set up a program that would provide loans for unemployed people who would like to start their own business and do not have good enough credit on their own. The initial fund would provide 136 million dollars for micro loans to entrepreneurs and is expected to leverage more than 500 million with cooperation from the European Investment Bank Group.

The newly named European MicroFinance Facility will begin lending up to 25,000 euros to small business and micro businesses as well as unemployed people who would like to become self employed but have exhausted all other means of lending. The fund will lend to businesses with fewer than 10 employees and is expected to provide around 45,000 loans over the next 8 years. László Andor, EU Commissioner for Employment and Social Affairs and Inclusion stated, “It will increase the supply and accessibility of micro loans so vulnerable groups find a way out of unemployment. It will also boost entrepreneurship and the social economy in Europe. We expect the facility to provide small loans to around 45,00 budding entrepreneurs over the next eight years.”

Efforts began on June 3rd, 2009 , when the European Council proposed a shared commitment for employment that highlighted three priorities: maintaining employment and promoting mobility; upgrading skills and matching labor market needs; and increasing access to employment.

Considering that 91% of all European businesses employ ten or fewer employees, the program looks to be a very successful one. Although the exact terms of the loans have yet to be spelled out, they are expected to be fairly standardized.

Although the United States does not technically have something aimed directly at loans for the unemployed, we still have the unemployment extensions. After these are exhausted, other forms of financial assistance may be required.

Why Senator Jim Bunning affects your unemployment loan.

Bill — Tue, 02 Mar 2010 17:27:55 +0000

Thanks a lot Senator.

Just who is Senator Jim Bunning and how could this lone senator affect loans for unemployed people? He’s the guy that blocked a bill in congress that would have extended unemployment benefits for hundreds of thousands of people. Well, today, he did it again.

The impact of this lone senator is getting quite significant, even after one week. Transportation projects that were included in the bill have been halted, resulting in the furlough of hundreds of thousands of jobs. People that were scheduled to lose benefits this week will now have to wait anywhere from a couple weeks to a couple months to resume benefits.

Congress hopes to have a resolution by the end of the week, but with senators like Jim Bunning, he probably won’t make it easy for people on unemployment. I am really at a loss as to what makes this guy think he can just toy with the lives of millions of people. I mean, really?

Of course, with potentially millions of people seeking additional financial help, this could have an impact on loans for the unemployed. It is certainly concievable that people could be turning to unemployment loans. And with more individuals seeking loans, the results could be interesting.

On one hand, you might see lending institutions be a little more picky as to just who they lend to. With the flood of people running to banks or credit unioins, they definately have more variety.

The amount of unsecured loans would be more of a concern than secured loans of course. Unsecured loans equal to no guarantee to the lender, so the risk is higher. And what happens if a lot of people default on those loans? Usually, the lending instution is forced to recoup the moneys in other ways. Like raising interest rates or instituting other fees. Another side effect to this would be what’s called ‘credit crunch’.

Credit crunch is when a large number of non-performing loans cause the lender to offer less credit. Basically, they are less willing to give out loans, due to a fear that the loans will not perform well.

I certainly hope that someone is able to talk some sense into Senator Jim Bunning. Otherwise we may see an impact on loans for the unemployed.

Loans For The Unemployed: A Primer

Bill — Mon, 01 Mar 2010 19:13:19 +0000

Loans for the unemployed can be tough to figure out. If you’ve never attempted to get a loan before, there can be even more to learn. If you have attempted to get a loan, then you should know what to expect. However, loans for unemployed people, work a little bit differently. There are essentially two types of loans available to unemployed people. Secured loans and unsecured loans. Ninety nine percent of these unemployment loans are also going to fall under the personal loan category. These differ from things like unemployed car loans or even unemployed student loans. That’s a whole other ball of wax.

But first let’s take a look at what happens when you get a loan. Traditionally, you would contact a lender of some kind (a bank or a credit union) and you meet with them and fill out a lot of paperwork. One of the first things the bank will want to know is how much you want to borrow. Don’t be surprised if the lender asks for your social security card, address and where you work and how long you’ve worked there. Expect to wait a couple days to get an answer. What they will do is run a check on your credit to determine how much of a risk you present. They take the amount you want to borrow, how much you make and what other liabilities you currently have, in order to make a decision. If you are approved, then another meeting is usually arranged to sign the paperwork and agree on the term or length of the loan. In some cases, it may be advisable to get what’s called a ‘co-signer’.

A co-signer is simply someone else who would be able to pay off the loan if you become unable to. In some cases, it might be your girlfriend or wife or a family relative that is willing to help out. A co-signer is also required to fill out paperwork that includes their social security number, address and their employment information. Some institutions may also require pay stubs from your most recent check. The co signer may also be required to provide this.

Unemployed loans or loans for the unemployed are going to be a bit different. Since you have no steady income stream, you’re going to have to get creative. A co signer that has decent credit might be required for you to get approved for the loan. The bank or credit union is not going to consider your unemployment check to be consistent income. This is where a co signer can make a big difference.

When you initially talk to a bank or credit union about the loan, it will more than likely be classified as either an unsecured loan or a secured loan. Here’s the difference. When you fill out the initial paperwork, the credit union will want to know what assets you currently possess. If you have a car that you own, this is an asset. If you own your own home, this is an asset. Anything that can be used as collateral against the possibility of you defaulting (failing to pay) on the loan, can be used as collateral. This is a secured loan. Secured loans typically have lower interest rates than unsecured loans. This is good. So if you have any collateral at all, do not forget to list it on the form.

An unsecured loan is essentially a loan with no collateral. It is more risky for the lender for several reasons. The biggest being, if you fail to pay the loan off, they have nothing to recoup their investment on. Credit cards are typically all, unsecured loans. As a result, almost all the time, the interest rates are higher. Sometimes a lot higher. The terms of an unsecured loan are also typically, not as great. Personal loans for the unemployed, in which an unsecured loan is used, may typically include late fees or other fees if you default somehow.Some of the more riskier types of unsecured loans include loans called payday loans.

Payday loans work like this. The lender gives you an advance on your paycheck and takes a percentage out for themselves. So, if your paycheck is usually $500 a week. The lender may give you $450 or even $425.

Loans for the unemployed are a little more difficult to obtain because the income is not guaranteed for the lender. If you have collateral, use it. If not, then get a co signer. If you can’t get a co signer then your only options would be contacting banks or credit unions about unsecured loans. Credit cards may be an option but be aware of their terms. Payday loans would be an absolute last resort in my book./* FloatRight,336×280, created 3/19/10 */