Unemployed with outstanding loans, what’s the solution?
Many people experience unemployment during their careers. This is a period that can be difficult to manage, depending on planned expenditure. If you lose your job, you receive an income 20% to 30% lower than your salary when in employment. If you have outstanding loans at that time, the situation can become difficult to sustain. What are the options?
With unemployment insurance
If you have unemployment insurance in place before becoming unemployed, this can act to compensate for the loss of earnings due to unemployment and allow you to continue to make loan repayments. With the unemployment insurance offered by Crédits Conseils, you can receive a monthly income ranging from 500 CHF to 2000 CHF. Premiums range from 15.90 CHF to 92.20 CHF per month. You can be covered for up to 12 months per period of unemployment, and up to 36 for the entire term of the contract with insurance.
But beware! To receive this amount, you must wait 90 days between the date of signature of the contract with insurance and the date that you are unemployed. Otherwise, you receive nothing for the total period of unemployment until you re-enter employment. For this reason, you need to plan ahead and take out insurance in advance. It is also important to specify that unemployment insurance only applies when you are made redundant. It does not apply if you resign or you are made redundant due to gross misconduct committed at work.
Without unemployment insurance
If you have no unemployment insurance when you become unemployed, the situation becomes complicated. It is too late to take out unemployment insurance that would cover your loan repayments during your period of unemployment. However, it is essential to contact the financial institution in question quickly. They may be able to provide you with suitable solutions for your loan repayments in order to avoid a serious situation.
However, responsible credit, implemented by several banks since 2016, means that unsustainable situations are avoided in the event of significant unexpected events. By creating a personalised risk profile that includes a sufficient security margin for the person requesting the loan, banks give clients the opportunity to avoid being overburdened by debt due to credit that is too difficult to repay.
Some banks plan ahead for you and include unemployment insurance in their offer. Eny Finance is one of them. This solution can be a feasible option for those who welcome an all-in-one formula when taking out a loan. Others, such as Banque Migros or Cembra Money Bank, offer this as an extra option, to be paid in addition to the loan itself.
- Categories: Consumer credit