Not a day goes by in our various activity offices where we do not receive a credit application from an unemployed person. Indeed, people who emerge unemployed are also faced with having to face major purchases and the unemployed, even more than anyone, therefore implicitly sees his ability to pay extremely limited. He, more than any other taxpayer, will therefore have difficulty paying the price of a washing machine, a car or a computer: in short to provide for his basic necessities in order to find a job. Is it possible, legally, to grant a loan or credit to an unemployed person?
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The harsh reality…
When your unemployment benefit is around 1,400 dollars and you have paid your rent, the balance with which an unemployed person has to support himself very quickly becomes limited. Therefore, buying a basic necessity such as a car, a washing machine, a coffee table, a refrigerator can prove to be a real challenge… However, finding a job requires presenting yourself properly dressed and neat at interviews with selection, browse job offers and send letters of application and a CV, tasks for which the use of a computer, a printer is essential.
Can we give credit to an unemployed person?
What will determine the willingness of a financial organization to grant credit will be, in addition to the contributory capacity, the possibility of making a seizure in the event of non-payment of the monthly premiums. Belgian and Luxembourg legislators have decided to make unemployment benefits exempt from seizure below a certain amount (except as regards the recovery of arrears in maintenance payments). The unemployed person is therefore somehow guaranteed to keep their unemployment benefit.
This gift from the legislator, which makes the unemployed less responsible, acts like a sword of Damocles hanging over the shoulders of the unemployed. Indeed, because if as we have explained, the unemployed person is deprived of a recovery on his unemployment benefits, his capacity to borrow is, by necessity, extremely reduced.
Thus, very often, the unemployed will be refused a loan or credit request since the financial institution will not be able to make a seizure at source of his unemployment benefits in the event of non-payment of monthly premiums.
Is there an alternative to allow the unemployed to access credit?
Regarding the installment loan
The unemployed person must imperatively obtain a guarantee, a surety or a guarantor if he wants to obtain a credit or a loan. In other words, the unemployed cannot borrow alone. He will have to find a co-signer, a co-borrower, that is to say a person who borrows with him and who will have to be perfectly solvent.
Regarding mortgage credit
The unemployed person who owns a house or real estate (land, building, etc.) can take out a mortgage loan, but only if they take out a mortgage on the real estate.
This still means that the amount of the loan cannot be less than $ 25,000 because the costs of setting up a mortgage are so high that it would not be reasonable to take out a mortgage for a lower amount.
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