For banks and credit institutions, people without a permanent employment relationship are among the customers with a particularly high risk of default when granting loans. The unemployment benefit is not rated as income and can be reduced or canceled by the offices at any time. Even if a credit broker is to work for the unemployed, the credit business can often not come about due to the lack of collateral.
Credit intermediaries charge higher interest rates and fees
A reputable credit broker who is supposed to mediate a loan transaction with a bank or a financier for the unemployed naturally requires collateral. Since monthly income is not available as security, savings, life insurance or sureties can be offered as security.
A solvent co-applicant who pays for the installments in the event of a loan default can also close the security gap. Anyone who hires a credit intermediary must expect interest rates that are above the usual market interest rate. In addition, processing fees may apply, which may also be charged if no credit transaction is concluded.
Seriousness is very important for credit intermediaries
In addition to reputable companies, brokers are repeatedly active in the lending business who make profits when people are in need. Attractive offers attract customers who promise a loan. Credit intermediaries who provide a loan to the unemployed that incurs agency fees before the application is avoided.
Credit intermediaries visiting the borrower at home should also be rejected. Often only insurance is sold here or applications for asset-based benefits are sold. The agent can invoice and even sue for the costs of arrival and departure as well as for the consultation.
Loans can also be brokered privately
If a credit intermediary does not work for the unemployed because the necessary security is lacking, online credit portals can help. On these portals, private lenders help borrowers to borrow if they have been rejected by banks or institutions. After registration, the borrower creates a personal profile and sets up an individual loan project.
To ensure security for private lenders, Credit Bureau information is obtained upon registration. However, a credit check like that of banks or credit agencies is not carried out. If the loan project is financed by private donors, the desired loan is paid out. The monthly installments are paid to a bank that repays the borrowed amount.
Insurance can be loaned in an emergency
If you do not get a loan due to your unemployment, you have the option of loaning existing life insurance or terminating savings contracts. Although this is usually associated with considerable interest rate losses, it prevents indebtedness and relieves other obligations that arise from a credit intermediary for the unemployed.