Payday Loans

Payday loan in case of unemployment

Whether you are active or not, certain projects such as buying a car or working in the house require the use of a loan. And even more when you are unemployed and you receive meager unemployment benefits! In this case, money problems lie in wait. See for a write-up

The payday loan, which requires no proof of use, can then be a boost and make it possible to make ends meet temporarily. A legitimate question then arises for the potential borrower: are payday loan contracts and unemployment compatible? Cream Bank answers you.

Review of the payday loan and its main interests

Review of the personal loan and its main interests

A payday loan is a form of consumer credit. It falls into this category of credits, in the same way as revolving credit or restricted credit, among others. But unlike restricted credit, the payday loan is not used to finance a specific purchase. The amount granted can be used as desired by the borrower (excluding real estate).

This type of credit agreement is interesting, in particular, to meet expenses related to the job search (driving license, acquisition of a vehicle to be able to move, computer to consult the job offers…). Of course, the payday loan can also be used to meet the most basic needs of the borrower (shopping, rent, electricity bills, replacement of household appliances, etc.).

Note: what is the maximum amount and duration for this consumer loan?
The maximum amount that can be borrowed for a payday loan is set at $ 75,000. The repayment duration varies depending on the bank but generally does not exceed 7 years.

payday loan: I am unemployed, can I become a borrower?

Personal loan: I am unemployed, can I become a borrower?

Getting a payday loan consumer credit while unemployed is complicated. Why complicated? For two obvious reasons that come together:

  1. There is no guarantee to the bank that the repayment of the credit will be made without incident. Unemployment benefits are not permanent and are not considered as fixed income. The operation is therefore risky for the bank: will it really recover its money according to the terms of the contract?
  2. When the budget is already tight and unexpected expenses arise, monthly payments can become complicated to assume. However, unpaid debts would put the borrower in an even more difficult situation because of the late payment penalties that would apply. And that, the banks take it into account! Note that the amount of these penalties must be clearly indicated on the loan contract.

So we said complicated … but not impossible! Fortunately, professional status is not the only factor analyzed by the bank to decide whether or not to grant loans. As an unemployed person, are you actively looking for a job? Have you just lost your job and is it just a temporary situation? On the contrary, have you had long periods of inactivity? Do you have a feasible professional project in mind, like setting up your company? These are all questions that can be asked by the banker to gauge your situation as a whole.

To verify your statements, the banker will obviously rely on supporting documents that you will be required to provide, such as:

  • your last tax notice;
  • your latest pay stubs;
  • your latest account statements.

The bank will also consider other points, such as the remainder of the borrower’s life and any collateral provided. The more positive the borrower brings to the table, the more the balance will tip in his favor.

What are these famous guarantees?


Among the main guarantees that the borrower can raise to cover his payday loan while he is unemployed:

  • The surety: a person close to you or a surety company stands surety in the event of default on your part. Please note, if you go through a company, you will have to pay costs.
  • The pledge: securities are brought directly to the bank. This assumes the existence of a life insurance contract or an investment.

If the collateral is sufficient, you have the best chance of signing a credit agreement. And suddenly, the borrower insurance will not have to be, which ensures you to make substantial savings.

Note: insurance, an obligation?
By law, no. But if you do not have a guarantee, know that as an unemployed person, the bank will generally agree to the loan only if you take out insurance. Consider lifting your right to the delegation of insurance to reduce costs!

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