Take out a loan without a job, a complex situation
Jobseekers, low-income earners or recipients of social minima: these people in precarious situations are very likely to be refused credit applications from banking institutions. There is, however, another solution to access to loans for all those people more or less excluded from the banking system.
These people can then subscribe to a payday loan if their budget and repayment capacity are considered satisfactory.
What is payday loan?
Several rules govern payday loan:
- the loan amount must be from 300 to 3,000 € (5,000 € for some exceptions)
- the duration ranges from 6 to 36 months (48 months for exceptional cases)
- interest is generally between 1.5% and 4% (without application fees, insurance or in the event of early repayment)
According to the microfinance barometer, more than 100,000 personal micro-loans had been granted at the end of 2016 since the creation of this type of loan in France in 2005. Similarly, in 2016, nearly 16,000 payday loans had been subscribed.
This is a credit that is, in part, guaranteed by the state. The microcredit can be subscribed for personal or professional purposes. On the other hand, it can not be granted for the purpose of starting a business.
Who to turn to for an unemployed loan?
If a job seeker wishes to benefit from a microcredit, he can apply to a specialized financial institution, such as Crédit Municipal de Paris, or to a social association, a Municipal Social Action Center (CCAS) or a house of employment.
What types of projects can finance a loan for the unemployed?
payday loan can finance several projects:
- a driving license
- buying a car
- a purchase of first necessity (bed, fridge…)
- Professional formation
- health care (dental, optical…)
- agency fees
- the deposit of a deposit
- attorney fees
- funeral expenses
Jobseeker’s Credit: A Majority of Professional Loan
The primary motivation for borrowers is return to work. According to figures from the SED Consignations, 74% of the payday loans awarded were related to employment and mobility.
For example, an underwriter uses payday loan to buy a car to get to his place of work. Other people are turning to this type of financing in order to finance training, care or contribute to the financing of housing and its equipment.
In 2014, the Banking Inclusion Observatory estimated the average amount of payday loan at € 2,266.
Focus on the microcredit of the SED
For those who are in financial difficulty, SED offers car loans, real estate purchases and household appliances. The allocation of these loans is subject to the following conditions:
- Have low resources, such as RSA (Active Solidarity Income). In 2017, it amounts to 535 euros for a single person, 802 euros for a person with a dependent child and 963 euros with 2 dependent children, adding 214 euros per additional child.
- Have at least one dependent child.
- To be able to pay part of the amount of the financed property.
As part of the return to employment, a car loan from SED can be envisaged up to 1 500 euros. If the borrower wants to change cars, the SED can also lend him up to 1250 euros.
Other credits, such as the Zero Rate Loan (PTZ), are available to finance a real estate purchase.
Unlike other loans, SED will not pay the amount borrowed from the borrower’s bank account. It is the provider of the service or property that will be directly credited. The repayment of the consumer credit is made by deduction of the allowances paid.