The situation on the labor market is dynamic. Although we do not allow this thought, it may turn out that one day we will join the ranks of the unemployed. The situation will get complicated if we have a loan to repay. Especially a mortgage or another one whose installments are calculated many months ahead. What then? Losing a job alone is frustrating and causes a lot of problems, and if it comes to commitments to financial institutions, everything is even more difficult. Job loss and credit – what is the most important? First of all, we need to think about delays, otherwise not only interest increases, but also our name can quickly reach the debtors database.
Stay ahead of the facts and think about insurance
The easiest situation is when we don’t have a loan yet and we want to think preventively. It is worth considering unemployment insurance at this time. Unfortunately, most of us do not allow ourselves to think that we will be without resources. What does it mean? That many of us do not think before signing the loan agreement that at some point there may be a problem with repayment. It is only when job loss becomes a fact that panic and fear arise about how to deal with it. So let’s start with the situation when we have just lost our job and we do not have insurance. Credit and job loss – how does it relate to each other and where to start?
I lost my job and I have a loan – what to do?
First of all, we can’t panic and pretend that everything will solve itself. This will not happen, but we certainly cannot make decisions under the influence of emotions, because these are not a particularly good advisor. We already have enough problems to face further unpleasantness.
When we know that we are losing our job, we should immediately take into account that there will be problems with paying off the loan. Therefore, we must immediately go to the bank. Preferably before the next installment payment deadline. If we pretend that nothing happened, we will stop answering phone calls from the bank and react to later reminders, at some point a bailiff will visit us, and it will not be pleasant. The worst thing we can do is … do nothing!
How to deal with a loan?
Banks approach this differently, but it is always worth negotiating the terms of further repayments. According to the latest regulations, it is the banks’ responsibility to assist the customer in repaying the liability. Insurance against a job loss loan would make it much easier, but even without it, the bank will help us. We can definitely apply for extending the loan period. In this way, we can reduce the installments, which will certainly be a smaller burden on the budget when we are unemployed. When we find a new job, we can switch to the previous accounting system. This option will be impossible if the loan was spread over the maximum number of installments from the beginning.
Loan consolidation is another option. This option is attractive when we have more than one commitment at a time. If until now installments have been repaid systematically, we can try to combine them into one sum that will allow you to pay lower amounts. We still have credit holidays at our disposal. In this situation, we can suspend the payment of installments for a specified period, then an annex is created to the contract.
A consolidation loan
It happens that, despite strenuous efforts on our part, the bank will not look at us favorably. Not to mention proposing favorable conditions to us. Especially when we admit financial problems too late and the arrears have already grown. Then we can go to non-bank institutions and apply for a consolidation loan or other financial product. Loan companies have often helped to get out of trouble, but you have to be careful about prepared offers and remember that short-term repayments can be difficult to realize. Nevertheless, it can be helpful before we find a new job.
Insurance against loss of job
It looks a little different when we have unemployment insurance. The advantage of this solution is that you can gain more security this way. If you’re just getting ready for a loan, you should definitely take credit insurance against unemployment.
Each financial institution prepares its own insurance offer, so we cannot act hurriedly. Each proposal must be carefully looked at, the conditions and the situations in which it will prove support. The issue of costs may be the same. Many banks stipulate that unemployment insurance applies only when the employer dismisses us. After we free ourselves, it may turn out that we are not entitled to insurance. Some borrowers resign from insurance for the amounts that accompany them. Of course, the height depends on, among others on the loan amount. It often oscillates around 1-2% of the total amount, which is added to the installments.