If you have the misfortune of being unemployed and you have bad credit on top of that, then you know how difficult it can be to get a loan and keep your cash flow going. Many of the quick loan options are based on you having a regular paycheck. When that paycheck does not exist, your options narrow.
Fortunately, some lenders understand that unemployment is striking many people that thought they were invulnerable to it. You do have options beyond payday loans. Here are a couple of ways to get a loan for bad credit while being unemployed.
A loan from a credit union
There are several ways that you can approach this possible source of funds. You can either have a long chat with a loan rep at a credit union that you already belong to or you can join one in your area. Credit unions offer better rates than banks because they are owned by their members and are non-profit organizations. You don’t necessarily have to be a part of the branch of military or union that the credit union has in its name.
You also might be able to persuade a friend that has an account at one of these credit unions to take out a small loan for you in his/her name. People will be more inclined to help you in this way if the interest rates are manageable and the terms convenient. Do some research in your area and in your circle of friends and family and see if you can tap into a credit union’s less profit-based approach.
Unemployed with a home of your own?
A home equity line of credit might sound humorous to some (who owns a home and is unemployed??) but the harsh reality is that many homeowners are finding themselves unemployed during the current economic slowdown.
If you have equity in your home, you can tap it through a low-interest, tax-deductible line of credit. There is some danger with this option, however. If you fall further behind financially, you could end up not being able to repay this line of credit and then having your home foreclosed. So, if you choose this option, think long and hard about just how much cash you need before you can begin to earn some sort of income again.
That, of course, is hard to predict, but if you are willing to work at a job that is not in your specialty or skill set, you can earn at least a bit of money and avoid abusing your equity line of credit. Don’t forget: abuse of home equity lines of credit are part of what got the United States in the current economic mess that it is in. Don’t add to that number by taking out a line of credit too large. Better err on the lower end of such lines of credit so that you can repay it in time as your financial picture improves. A home equity line of credit is one of the loans for the unemployed with bad credit that is lying right beneath the nose of many.