How to pay off debt while unemployed apart from taking loans
February 9, 2023

Suffering from overarching debt as an unemployed is an unfortunate event. Amid making a living, individuals stress the pending credit card and other loan payments. At the same time, many resorts to credit cards to pay off bills straight. It is not a good idea.

Because by doing so, you only add up to the debt. Credit card debt is high-interest debt that could ruin the credit history further. So, what can you do in this case? Do you have any options? The answer is Yes, you do have plenty. These options may differ per the circumstances and financial situation, but they can help you in extreme distress.

7 Ways to Clear Off Some Debts When Jobless

Under an unstable economy and financial situation, one must keep a savings pot safe. It should remain untapped like emergency funds. One must tap it only in extreme financial distress, like- when you are left with no other option but to get some money out of your emergency or retirement account. However, until then, you have multiple options that you can use to pay your debts.

While debt may not sound fantastic, you can resort to some loans in Ireland online that could help you manage finances better. Facilities like debt consolidation can prove impactful here. You can use the same to release some financial stress or debts. Moreover, you can reduce interest rates and repayments by doing so.

You can explore and utilise many such opportunities to clear off debts without impacting the bottom line. Let’s quickly check the options: 

1)      Check for a hardship program

It could assist you in paying off the debts without burdening your existing financial situation. A hardship program is nothing but contacting creditors to lower the monthly minimum payment that you make. The option is beneficial if you are nearing default. The lenders, in this case, could grant hardship programs if you are short on your mortgage or car loan payments. Check whether you may qualify for the same or not.

2)      Cut and prioritise expenses

Budget is significant when you are living without much means to tap. Here, things like cutting on unnecessary things can help save. Decide what you truly need without balancing it in terms of wants. Check the needs and then decide.

Prioritize the needs and calculate the exact you need for the month. Leave some space for extras like- emergencies in the budget. Split the discretionary and mandatory expenses. It may include reducing insurance premiums too or avoiding car upgrades. If possible, try doing the following things to save more for the month:

  • Negotiate the rental payments with the landlord until you recover from financial constraints.
  • Eliminate the heating and cooling or limit it. Save on energy costs
  • Avoid dining out or ordering food, instead cook at home

3)      Limit the use of credit cards while unemployed

As mentioned in the introduction, the unemployed tend to live by credit cards hoping to get a job and repay the debt. What if it took you a long to get your dream job? Thus, one must stop or limit using credit cards to pay bills. Instead, one can resort to quick or small loans to pay off the debts.

Moreover, getting new cards or increasing the credit limit might seem appealing. It would help if you avoided the practice. Additional limits or new credit cards will only add to the surmounting debt figures. Avoid applying for new credit cards until you grab a stable employment opportunity. Reducing the usage will help you reduce liability and save extras that you would otherwise have to pay towards your credit card bill.

4)      Check for unemployed government benefits

You must seek different ways to get additional help on your finances if you are unemployed. Explore different facilities and government benefits that you may qualify for. It could be anything like- food. Lunch assistance, disability allowance, and unemployed benefits. These could help you cover up debts or pay them in small amounts if you have abandoned the payments since unemployment. You must register early as you get laid off or leave the job owing to company issues. The process is time-consuming. But once you receive your first payment, things become better.

5)      Sell off some equity in the home to pay debts

If you hold a property and are a homeowner, you can quickly sell some equity to pay off all your debts. It is ideal when you have many high-interest debts that could quickly lead to bankruptcy. In that case, you can consider this option. However, never decide in haste, as you may lose the equity if you cannot repay the debt within the agreed terms and deadline. However, if you believe you may soon get the job opportunity or have something in mind that you can use to pay off the debt, the option may be helpful.

6)      Identify job opportunities and part-time work

As an unemployed individual, you must not be taken aback by a job loss; instead, work towards rectifying the deal. Explore part-time work opportunities to arrange for or pay the bare minimum for loans. Getting a full-time job may be time-consuming, but you can find ample opportunities for part-time online. Check your interest and expertise and apply for the same on platforms online. It will help you manage finances well amid the unemployment phase.

7)      Contact the previous employer for a redundancy fund

If you lose your job owing to no fault, you are entitled to some redundancy fund. The employer must provide it to you within the agreed time. It could be sufficient to sustain until the next best job opportunity and pay off debts. However, one must be aware of the rights and contact the employer early or within a week of unemployment. You must get a written statement of the criteria for calculating the funds you deserve to receive. It would help you ensure clarity.

However, until you receive the redundancy fund, you may encounter situations where you may need urgent money. Without a savings backup, things may go haywire. Online loans in Ireland, like doorstep loans, can help you get cash home or account numbers as per flexibility. Using the same, you can counter any small fund need without panic.

Bottom line

These are some ways to pay your loans comfortably in unemployment. It is okay that you may not fund debts completely, but you can indeed reduce debts. Alongside, search for part-time opportunities to sustain well.

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