Getting a loan while receiving sickness benefit is not always easy, especially if it has been drawn over a long period of time. The reason for this is that the employee is not an attractive borrower in this case, at least taking into account the predetermined criteria of the banks. However, it is not impossible to get a loan despite sick pay. There are a few things to keep in mind.
Loan with sick pay initially possible
The easiest way to get a sick pay loan is if the illness hasn’t been around for too long. Therefore, the deadline for applying for a loan should be as close as possible and it is also advisable to have the latest proof of wages payment available in addition to proof of sickness benefit payment. Ideally, these emphasize once again that the disease has not lasted too long and, on the other hand, it shows normal earnings as an employee. With a little luck, this can provide the necessary backing to get an advantageous loan with very good conditions.
With a long illness it becomes more difficult
If the disease has been going on for a long time and there may be no end in sight, it will be more difficult to get a loan. Most banks and credit institutions will most likely question and thoroughly screen the loan application and the borrower as well. Since sickness benefit is not paid on a permanent basis and is therefore not considered to be a loan-safe income, credit institutions are very cautious in this regard.
However, this does not mean that the sickness loan is hopeless. This is particularly the case if there is collateral or if the guarantee is assumed by another person. This would cover the installments if the borrower were unable to pay. It is definitely worth a try, but there are two main factors: the overall impression that the loan applicant leaves and the clerk.
Credit without proof of wages and security
If a loan with sick pay is not approved by your own bank or other credit institutions, you can also resort to a loan that does not require collateral, Credit Bureau information or proof of wages. With these providers, getting a loan is usually not a problem. However, it should be noted that the conditions are often not favorable. In many cases, the loan amounts to be granted are very limited, whereby the annual percentage rate rises sharply and the repayment of the loan cannot be made individually and flexibly.
A credit institution and private lenders who offer these loans should always be checked very carefully before signing the loan application, because the first loan approved does not have to be the best and certainly not the most serious. There are still a lot of black sheep in the credit industry today. However, extensive research on the Internet is usually enough to distinguish these providers from the trustworthy rest.