Unemployment, with itself brings about a plethora of ills. Most of these ills do not have their roots in the status of employment but are more closely linked to money or the ready cash in hand with the person. The person may be clear of the reasons or the duration of unemployment but adversities, exigencies, bills and even day to day expenses tend to trouble the unemployed more than others.
In such times of need, secured loans for the unemployed come as a great savior, and the home of the unemployed comes out as an all important asset. Due to the security the collateral of a home provides, lenders have shown quite some interest in being prompt about lending the money to the unemployed. What also comes to matter is the tentative period of unemployment and the borrower's credit history before the period of unemployment. These factors are important when deciding the interest rate on the loan.
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Secured Loans for the Unemployed in the UK are also termed as Home Equity Loans. Though secured loans can also be obtained against other collateral, in most of the cases, a home is the asset that gives the unemployed any significant amount of money which may pull the borrower out of the current quandary and may possibly also assist in obtaining a job. It should be kept in mind that the interest of the lender is not out of sympathy for the status of the individual, it is more due to the high interest rates and the security the collateral provides.
Equity here is the amount that can be obtained if the house is liquidated. This value is a measure to decide the amount to be lent. With good negotiating and good credentials, it is possible to obtain loans up to 70% of the value of the equity. For other kinds of secured loans, the value is more (up to 80%) but this is justifiable since the loans to the unemployed are at a higher risk to the lender. Also, the borrower can decide to obtain the amount in one go or can spread it over the complete expected period of unemployment. This reduces the burden of interest falling on the borrower all in one go, if the money was meant just to fulfill the livelihood need on a month-to-month basis.
There are some points that the borrower needs to take care of in this context. One should not in desperation go for the first available loan at whatever interest rate it is offered. A detailed study over the Internet and various listings provide a good idea of the market scenario and one must go for the best rates that are available. The lender should not be allowed to take an advantage of the situation the borrower is in.
Secondly, you as the borrower should be very clear about the terms of repayment, any penalties and the spread of the interest rates. The fine print if missed at this hour becomes a big sore point later. Secured loans for the unemployed normally allow the borrower to start paying after getting an employment but the details should be clearly mentioned in the contract.
Also, you must be aware of the speed with which the money can be procured. Some lenders promise to make the amount available with speed but do not do so. This can be checked beforehand, there are listings and ratings of the borrowers and these must be confirmed before going ahead with a choice.
Finally, it is about the collateral and the money of the borrower. You must be approximately clear about the period of unemployment, the amount of money required and your repayment plan. If the period might last long, it is good to spread the usage of the money over the period and not consume the loaned amount soon. It is important to be wise about these things.
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