Loans offered by non-bank financial institutions are considered the most available on the market. Minimal formalities and an almost instant decision mean that more and more people are reaching for them. Should the unemployed benefit from payday loans?
To get a quick loan, all you need is your ID card, bank account number, and cell phone number. Only some loan companies require their clients to provide proof of income. This usually happens when applying for large amounts.
In other situations, the loan company only makes a decision based on the statement of a potential customer who declares the amount of his monthly inflows in the loan application.
Can an unemployed person get a loan?
Quick loans are a tempting source of financing for unplanned expenses. Especially for the unemployed who, due to lack of stable income, are not able to get a bank loan. As statistics show, as many as 21% of the unemployed are ready to use payday pay if the need arises. What do loan companies say?
Most loan companies declare that a borrower’s regular, regular income is required to obtain a loan. Detailed requirements of individual loan companies can be checked, e.g. in payday loan comparison.
However, the lack of proper verification by loan companies means that many unemployed borrowers not only apply for quick loans but also receive them. Without a regular income, such a person will simply not be able to repay the loan.
Unfortunately, the consequences of poorly thought out financial decisions can be really dramatic.
It’s easier to take, harder to payback
Without constant income, accumulating the required amount within 30 or 60 days may be an insurmountable barrier. From here, it’s just a step to a financial disaster.
A dangerous debt loop
Inability to raise the amount needed to pay off often results in … taking another loan. Acting in this way, there is a huge risk of falling into a debt loop that is difficult to untangle. The consequences of this state of affairs can be truly deplorable. In addition to financial ruin, the need for unpleasant meetings with the debt collector and bailiff, long-term debt is also a huge psychological burden.
Depression, neuroses and addictions are the everyday life of many borrowers who did not predict the consequences of their actions when making low-cost financial decisions.