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Credit for the unemployed – unemployment loan?

Are you unemployed and would like to take out a credit for the unemployed, a personal loan or a consumer credit? Are unemployment and a demand for credit compatible? Is it possible for an unemployed person to obtain a credit? This is the subject that we will briefly deal with today.

Difficult access for the unemployed to credit

unemployed to credit

We regularly receive credit applications from unemployed people. These are generally people who have recently lost their jobs and who have recently been unemployed. Some unemployed people thus enjoy a comfortable heritage acquired during their working life. What conditions the obtaining of a credit is the seizability of income. In other words, a credit can only be granted to a solvent person, that is to say a person whose bank can easily seize the income in the event of default.

Unemployment benefits are not garnishable, which hinders access to credit in principle.

Seizure thresholds

unemployed loan

The law organized a progressive regime for the seizure of income (wages) and in particular unemployment benefits (regime different from that of wages).

Attachment of wages allows the creditor to attach part of the debtor’s salary or social allowance for the reimbursement of his debt.

For income from activities other than the performance of a work or apprenticeship contract, such as unemployment or sickness benefit, pension, etc., the limits must be applied from January 1, 2013 following.

Net monthly income share entered amount entered
$ 0 – $ 1,069 0% 0
<$ 1,069.01 <$ 1,149 20% $ 15.80
<$ 1,149.01 <$ 1,386 40% $ 94
+ $ 1,386 net above $ 1,386

Unemployment benefits are therefore fully seizable beyond a monthly amount of $ 1,386.

This means that below this amount, the creditor cannot enter your unemployment benefit in the event of default. In this case, your access to credit is of course reduced and you are unlikely to have your request for credit accepted.

Existence of other guarantees

unemployed loans

A person may become unemployed after years of work during which they have acquired a comfortable wealth (eg house, car, savings, securities account).

If this unemployed person wants to apply for a loan, the credit intermediary (the broker) will carefully examine his financial situation and see to what extent he can find guarantees.

Most often, this will involve registering a conventional mortgage on a real estate property that is vacant and free of charges for the unemployed.

Note that the mortgage credit is not acceptable beyond a certain amount (generally $ 25,000) given the notarial fees that this type of credit generates.