It’s normal to assume that if you’re unemployed at the moment, then you cannot apply for a loan. This may be true of traditional bank loans, but there are alternative loan options that don’t necessarily need you to be employed.
Unemployment in Botswana
Botswana has a fairly high unemployment rate when compared to other countries at 17.36% as of 2017. When compared to previous years, there doesn’t appear to be a downward trend either. In fact, this figure has gone up since 2015, when it was 17.02%.
Unemployment, whether long term or temporary, puts tremendous financial strain on families, particularly when they lose their breadwinner. It’s these people that tend to need a financial boost the most but are almost always turned down for a loan.
Alternatives to traditional bank loans
Banks and other financial institutions will usually reject your application without a steady income. While there are alternative loan options that don’t require an income, be aware that these loans may come with higher interest rates. Lenders may offset the risk of lending money to an unemployed person with a slightly higher interest rate.
Short-term loans
Most short-term loan providers do require you be employed, but there are some that will accept other forms of income, or proof that you have access to funds that you can use to repay the loan. In these cases, you will generally need to have a very good credit rating and some form of investment or alternative income.
Loan sharks
Unregulated lenders, usually known as loan sharks, may lend money to an unemployed person, however, these loans carry huge risks. Because they are unregulated, these lenders are free to charge as much as they wish. This can make the repayment amount on such loans unfeasible and put you into much more debt than you were initially prepared for.
Asset-based loans
The most low-risk loan option for the unemployed is still asset-based loans. These short-term loans use a paid off asset such as a vehicle or jewellery as collateral on the loan. After the asset is appraised, a loan amount is offered based on the asset’s true value. Once the loan and the interest are repaid, the asset is returned to its owner.
The benefits of asset-based loans
Here are some of the advantages that asset-based loans have over a traditional bank loan:
- no credit checks are required
- the loan won’t affect your credit score
- the application process is easy, transparent and discreet
- no minimum earning amount is required
- being unemployed or under debt review doesn’t make you ineligible
- you can typically access the cash within 24 hours.
At lamna Botswana, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or valuable works of art. For more information about using an asset to get a short-term loan if you’re unemployed (or for any other reason), contact us on 71 388 088 or simply complete and submit our online application form.