If the statistics for the quarter ended April 2005 are to be believed, about 1,96,000 people were added to the list of people unemployed that brought the total to 28.58 million. Doesn’t that make up a sizable figure? It certainly does. Unemployment among the residents of the UK is increasing, though at a lesser rate. Unemployment according to The Columbia Encyclopedia is a “condition of one who is able to work but unable to find work”. Unemployment is often accompanied by a scarcity of funds. The situation becomes grimmer if the job lost is the primary source of income. As unemployment continues, the individual gradually contracts many more malaises like poverty, indebtedness, and mental and physical disorders that characterise the lives of such people. Loans for unemployed however, offer a way out of this murky situation by providing access to a fairly large amount of money. A proper appraisal of the employment scenario must precede the loans for unemployed. The time within which the individual expects to retrieve employment will decide the manner in which the assistance through loans for unemployed is to be received. The amount under loans for unemployed is received in two ways. In the first method, a borrower receives a lump sum amount. This is known as a home equity loan. Home equity loan is generally secured against the home of the borrower. Borrowers who need to use the money for repaying debts or for acquiring home or property generally draw the entire sum at once. The second method is for people who are principally dependant on the loans for unemployed. The unemployment benefit received is generally inadequate to meet a particular standard of life. Through this method, the borrowers can either get a fixed monthly income for a particular period or draw amount as and when necessary. This is known as a home equity line of credit or HELOC for short. HELOC is a form of revolving credit under which the borrowers are approved for a specific amount of credit that depends on the credit limit. Borrowers are not compensated for the entire equity in the home. A certain percentage of the amount is required to be offered by the borrowers as deposit. In the computation of the home equity, any other debts or mortgages against home are deducted from the value so derived. Unemployment along with an absence of adequate assets to back debts can narrow the chances of getting a low interest loan for unemployed. They will have to choose from unsecured loans that are charged at a slightly higher rate of interest. The unsecured loans for unemployed, on the other hand are equally favourable to tend over the quandaries of unemployment, provided proper lending organisations are contacted to process the loan application. Loans for unemployed though, are not easily available. Unemployment is often considered a bad credit case. It is reasoned out that the unemployed person does not have a stable income source and is dependant on the unemployment benefit or dole offered by the government. Though the amount is sufficient to meet the necessities, it will be inadequate if used for making the repayments to loans. Too little is left after the borrower uses the unemployment allowance to meet the cost of repayment. However, not all lenders try to escape dealings with unemployed. In fact, there are many lenders who are open to deal with the unemployed. However, this does not lessen their concern for the money lent. Neither are they being generous. The risk involved is compensated by charging a higher rate of interest. A survey of the rates being charged by the reputed lenders will form the basis of the search. Proper information regarding the various intricacies of the loans for unemployed will offer a safeguard against difficulties in the future. Andrew baker has done his masters in finance from CPIT.He is engaged in providing free,professional,and independent advice to the residents of the UK.He works for the Secured
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