Initial jobless claims unexpectedly rose to 419,000 for the week ending July 10, according to the US Department of Labor Thursday. This is about 20% more than the 350,000 jobless claims predicted by several surveys of economists.
While initial jobless claims have continued to decline over the past year, dropping from over 1.4 million in mid-July 2020 to 419,000 today, the economic recovery can be unpredictable. With more than 3.2 million Americans still unemployed, according to the Department of Labor, many are looking for ways to make ends meet.
If you are looking for ways to get by during your unemployment spell, there are several options available to you, such as digging into your home equity or refinancing your debt to lower your monthly payments. Learn more about your options below and shop for a variety of financial products at Credible’s online marketplace.
EMERGENCY LOANS CAN HELP DURING THE CORONAVIRUS CRISIS – O GET ONE
Access a lump sum by taking out a personal loan
Personal loans are cash loans that you pay off in fixed monthly payments over a set period of time, usually a few years. Funding is quick and you could have access to cash the next business day after your approval.
Most personal loans are unsecured, which means you don’t have to provide collateral like your car or house. But because they are not asset-backed, personal loans have a more stringent set of eligibility criteria when it comes to credit history.
Personal lenders determine your eligibility and set your interest rate based on your credit rating and debt-to-income ratio. For this reason, it can be difficult to get a personal loan when you are unemployed or have a bad credit rating. However, some lenders are more lenient than others and will allow you to use your unemployment benefits as proof of income.
Check the potential interest rates on your personal loans by prequalifying on Credible’s online loan market. Checking your rate will not affect your credit score.
WILL BIDEN EXTEND THE ABSENCE OF STUDENT LOAN AGAIN? THIS IS WHAT WE KNOW
Leverage Your Home Equity With Cash Refinancing
With home values at an all time high, homeowners have earned tens of thousands of dollars in equity over the past year. You may be able to tap into the equity in your home with a cash refinance.
Cash-out refinancing involves taking out a new mortgage that is larger than your current mortgage, pocketing the difference to use as you see fit. This type of refinancing can potentially increase your monthly payments and your repayment term, but with mortgage rates at historically low levels, your repayment plan may not really change that much.
However, it can be difficult to refinance your mortgage while you are unemployed. Lenders will want to see that you have good credit and proof of income to make sure you can pay off the mortgage, and they won’t accept unemployment as a form of income. However, you may be able to refinance your mortgage if you have a co-signer who qualifies for eligibility or if you have another source of income, such as investments or self-employment.
Contact a loan officer at Credible to see if refinancing with withdrawal is the best option for you.
3 EASY WAYS TO REDUCE EXPENDITURE DURING THE EXPIRY OF THE MORATORIUM ON EXPULSIONS AND UNEMPLOYMENT ASSISTANCE IN CASE OF PANDEMIC
Refinance your other debts to reduce your monthly payments
Interest rates are historically low for many types of loans, including mortgages and student loans. So now is the perfect time to refinance your existing debt at a lower rate to lower your monthly payments so that you have more leeway in your budget. Here are a few options you can consider:
- Mortgage refinancing: If you own a home, your monthly mortgage payment is probably one of the biggest expenses from month to month. Mortgage refinance rates are at an all-time low with the pandemic refinancing fee waived, meaning you may be able to cut hundreds of your mortgage payments.
- Credit card refinancing: Credit card interest rates are noticeably high, and revolving credit debt is growing at a faster rate as consumers emerge from the pandemic. Making the minimum credit card payment can be costly if your balance is high. Paying off your credit card debt with a personal loan can help you lower your monthly payments, thanks to lower interest rates.
- Student loan refinancing: If you have private student loans, consider refinancing when rates are hovering at record highs. Refinancing your private student loan debt can help you save money each month. Just keep in mind that refinancing your federal student loans makes you ineligible for federal benefits, such as COVID-19 forbearance.
Loan refinancing can be a great way to lower your monthly payments while still meeting your debt obligations, but there are a few caveats. You want to make sure that you don’t take on a lot more debt or prolong your debt payments for too long, or you risk paying too much interest. Plus, it can be difficult to get favorable terms when refinancing if you don’t have an alternative income.
Still, low interest rates won’t last forever, so now is a good time to consider refinancing your debt on better terms. Find out what type of interest rate you qualify for on a variety of financial products on Credible.
WHAT CARES ACT MEANS FOR YOUR STUDENT LOANS
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.