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Consolidation Loans For The Unemployed

First off, thank you for looking! I'm a long time viewer, first time poster!

Basically in a nut shell I was made redundant around 6 months ago and pretty much all my benefit money goes on debt (loan,c.c,o.draft). I was having no problem at the time of taking these out at affording them and paying them back as I was employed and to this date I have never missed a payment or been late in making one (my loan is currently 3/5's paid off too:T)

Now comes the tricky part, i've contacted my bank twice and basically theres not much they can do in terms of restructure (only paying less off thus effecting my credit rating, i'll get to that in a second) which leaves me in a pickle because I now can't really afford to live on what is coming in, well I can afford the debts but not much else. Family and friends is out of the question and in terms of assets the only one I have is a very cheap car which I would need to get to work as the majority of vacancies are further a field.

Anyhooo, I have since found that there may be a grant available in the near future to become self employed, but it requires a good credit score and a small pot of money to help fund, which would be right up my street as I already have a business plan ready and would help me come off JSA.

So I am looking to consolidate my exisiting sub 5k debt into one loan, i've had a brief look at a ball park figure and it would save me around £40 a month and free up around £600 for the above venture, and although I would be paying for around 18 months extra this would really help set the ball in motion to possibly earn a living and get off benifits in the long run and to be able to live slightly easier!

Now the tricky part.....basically (and I do fully understand why) banks in general don't like lending to people with not much coming in. However I have always paid my debt weather working or on JSA and if I were successful in getting a loan to cover the existing debt I would have more breathing space and be able to invest in something like becoming self employed.

Soooo if anyone has ever applied for loan and had positive feedback whilst being unemployed or know of any lenders (reputable of course) or ideas i'd be very greatful. As I say 85% of the money would go straight away to pay off existing debts the rest to possible invest in a future plan (not a relaxing holiday.....unfortunatly)

Thanks :)

Comments

  • DCFC79
    DCFC79 Posts: 40,614 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 16 August 2012 pm31 5:20PM
    Whats your credit history like then ? as thats crucial before you do anything.

    Oh and be aware there may well be replies that you dont like but hey its an open forum and anyone can post.
  • BugsyBrowne
    BugsyBrowne Posts: 5,697 Forumite
    A reputable lender lending money to someone unemployed sorry mate I really can't honestly happening.

    People with good credit history and have high paid jobs are not even guaranteed loans.

    Also please don't fall for any type of loans on a google search as they will stitch you up and take money you ain't got.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    with only JSA as income, there is no realistic chance of getting a 5,000 loan except from your own bank; and that is pretty unlikely
  • Hi thanks for the replies so far.

    DCFC79 - Credit History is good, never faulted on any payments, last time I checked my file it was all green and up to date (i.e paying things off) never been declined credit.

    I am expecting some comments on my said unemployment and lending money which I understand, but hopefully people can see i'm only trying to find ways of easing my debt and eventually getting out of it without hindering my chances in the future and actually paying what I owe the best I can ideally.

    BUGSY - Would never join someone i've never heard of, always background check the company first and try and go with someone mentioned on here usually!
  • DevCoder
    DevCoder Posts: 3,361 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Either your own bank or a credit union, if this self-employed opportunity then approach your bank with a well thought out business plan with projections.

    Expect it to be hard graft though.
  • Hi Krisdorey

    My bank unfortunatly hasn't been of the help i'd like as ultimatly i'd like to pay them back what I owe and not default, although I guess it may be worth approaching one more time and explaining again.

    Credit Union were actually very helpful but did state i'd need to be a memeber for a few months and even then the loan amount would probably be alot lower meaning although it would be great for the start of a business it wouldn't help pay off any debts I already owe, so not totally fruitless but not ideal.
  • DevCoder
    DevCoder Posts: 3,361 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    If approaching your bank again then do make sure you have a very good business plan so they can see you are serious and not "winging it".

    A decent business plan with projections would at least make them think other than hitting the no button.
  • fwor
    fwor Posts: 6,846 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I think the only realistic reply to this one is an unqualified "No". No reputable loan company will consider lending to someone with no income (JSA is supposed to cover living and jobseeking costs only).

    The reason why is that it would be an almost perfect match for the term "irresponsible lending" - no reputable firm will consider, and even the mildly disreputable ones will just decline.

    Forget the bank - it doesn't matter how good your business plan is. Existing, established businesses with a proven, successful record are finding it hard to get credit right now - they simply won't be interested in taking a punt on a new start-up.

    The only real option is to get a job, pay down those debts while putting a little into the Credit Union every month, and then when the other debts are clear, take their small loan and go for the startup.
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