Why Is it so difficult to get a loan if you're un-employed?

[bexbex78]

I understand that banks need to know that you can make the re-payments - but I wouldn't need to get a loan in the first place if I had an income. The ironic thing is that I am currently doing un-paid work experience - something I need to do to enter editorial work. The banks simply do not want to help - even though the work experience is a investment for my future.

[halfadaily]

unfortunately that's the way it works. Banks will only lend money if you can guarantee to pay them the money back plus interest. You may end up a millionaire one day, but at the moment you would be considered a liability. Would you lend money to a stranger if you didn't know if you'd get it back? Good luck with the work experience.

[Oneeyedvic]

Banks are already classed as irresponsible lendeers by a lot of people. To give you money in the 'hope' that you would pay back? That really would be irresponsible.

What do you need the loan for? Are there arny grants / benefit loans to help? Have you tried your local job centre for advice?

[buildersmate]

You hit the nail on the head when you said Banks don't want to help - they aren't in the business of help. The terms under which money is lent is all about assessing the risk that the money might not be paid back. Unfortunately in your situation, people who don't know you well are likely to assess that the probability of you defaulting on the loan is higher than someone with a job. Lots of other factors go into it as well, like your credit history. An organisational body taking a different view are Governments, who use public resources to try and assist in the manner you suggest (Student Loans Company etc., training grants) but not for open-ended loans of the type that you would like. Sorry.

[andy-hughes]

If you are unemployed, you may have no property of you rown, and as such, you could be liable to disappear without leaving the proverbial forwarding address.

People with employment, families, and property are far less likely to disappear overnight.

I am not for one moment suggesting that this is how you would, or do behave, I'm simply puttin the response from the bank's point of view, which is based on experience of some clients in the past.

[bexbex78]

I understand fully that they see me as a liability - it's still annoying though, as I need the money to pay rent, bills. I can't wait for the day when I open an account with a decent wage and they make me coffee and consider me to be their new best friend!

[spaced]

put it this way, would you lend a stranger �1000 if he did not have a job and may find it difficult to pay you back? I sure wouldnt. theres your answer.