Expenses, when they spring up out of nowhere they can make your finances hard to manage. If you do not have a job it can be even worse. As strange as it might sound there are many types of loans for the unemployed available. Banks, lending institutions and even credit unions have an array of loans available to those out of work, the primary type being the secured loan.
A 'secured loan', as
the name suggests, is a loan which provides security to the institution
lending the same to a client. These loans, by their very nature, are
provided only against the security of a tangible property. The property
in question could be a car, house, stocks, land etc. The client availing
the loan has to surrender the title deeds of the property owned by him,
to the bank or other financial institution providing the loan. The
title deeds are retained by the bank/financial institution throughout
the term of the loan. This provides an assurance to the lending company,
with regard to the proper repayment of the loan. In case of default on
the part of the borrower, the lending institution is legally entitled to
settle the loan amount outstanding, by offsetting it against the sales
proceeds of the tangible property. The risk involved in lending a
secured loan is therefore minimal or almost a nullity. This provides for
greater transparency in dealings involving secured loans by banks.
Moreover, owing to the security provided, the borrower too stands to
benefit in terms of lower interest rates and convenient repayment
schedules. Certain institutions lend secured loans to borrowers against
the security of their bank accounts.
One needs to approach the traditional
financial institutions for securing a loan. It would be difficult for
unemployed people to obtain a loan but is not impossible. If one
provides a proper and high value security to the institution, loan
processing would be quick. There are unsecured loans and home equity
lines of credit as options available for loans for the unemployed but such funding options are not so
easy and they have stringent terms compared to a secured loan.