Getting a no-doc loan sounds like a great option, especially if you are jobless for some reason. Yet, that’s not all the gold that shines. And here’s why.
For some people, working in the informal sector is a choice. In turn, others go for it as their last resort. The causes of work outside the line of sight of governments vary. A factory worker who drives an unlicensed taxi at night and a plumber who fixes a broken water pipe are some of a few examples of the underground economy activities that add up to trillions of US dollars a year.
Being an informal worker means that you have no social insurance in sectors of the economy that are neither taxed nor regulated. The same story with the source of income. The events of recent years have shown that informal workers are more vulnerable to things that happen. And when it happens, getting a loan with no proof of income is challenging.
The share of workers in informal jobs in the US has crept steadily higher in the past decade. According to the Federal Reserve, a third of the US population had engaged in informal work. Unlike workers in the formal economy, who benefit from legal and social protections, workers in the shadow earn their living without a safety net.
Thus, you have no choice but to go to work, even if you are sick. Sounds familiar? Such workers have limited access to the health care and other benefits needed to weather the uncertain times. And when you don’t know how to pay for your next meal, let alone your rent, or keep yourself safe, you are more likely to turn to financial help.
Why Should I Care?
Think that working in the shadow is not a concern for you? Think again. It takes money out of your pocket. That’s how.
- buy black-market drugs; you risk suffering from unsafe products;
- pay for services ‘under the table’; you support human trafficking;
- put money into knock-off; you increase the number of illegitimate products;
- invest in a pirated DVD; you hurt every job in the movie industry;
- every time you shop for illegal underground economy activities, you fund terrorism, in some kind or another.
Still sure the underground economy isn’t a trouble for you? It affects individuals who work in the shadow and their families in many ways. It also affects you, both directly and indirectly.
Benefits You Get Working in the Formal Economy
There are different reasons why people enter the underground economy. And education is not the only one to blame for. Yet, it would be best if you know the benefits you can gain working in the formal economy.
- access to financial wellness programs;
- health insurance benefits that help address the high cost and improve the well-being;
- more paid time off options for medical and family leave;
- mental health programs – depression and burnout is not strange to one in four US employees; so taking advantage of mental health programs is smart;
- career advancement opportunities that are a big win-win for employers; according to the report, only 29 percent of employees are happy with their current career development opportunities;
- social responsibility benefits;
- student loan benefit.
How to Act If You Don’t Have a Proof of Income
Financial literacy can cost big-times thousands of workers in the shadow. Unfortunately, they are the target of loan sharks. As a result, people are encouraged to take out the wrong kind of debt. That’s where loan sharks come into play, offering loans with no proof of income that comes with ridiculously high-interest rates.
To be eligible for bank accounts and legitimate loan lenders, proof of income is a must.
The loan approval process is one of the most vital steps to your financial assistance. And the proof of income plays one of the first violins here. Now, an important thing to consider here. Don’t have regular employment? But how to get loans like OppLoans with no proof of income?
The good news is that you have options. Maybe you get retirement funds, alimony, or child support payments? And forget not about investment returns. There are, of course, other forms of income you can get. Anyway, when you apply for a loan, your application needs to show it.
Getting funding with no proof of income is always a more convenient option. Ease is a big factor as well. But there’s a trick. No proof income loans are bad for people who want to cope with financial troubles.
If you can’t provide income documentation, you’d better look for other options. The lender that offers loans with no proof of income will see you as a risky borrower. As a result, the lender will forego the documents in exchange for a higher interest rate or added fees.
Risks involved in getting a loan with no proof of income:
- Damage your credit score;
- A lower loan amount possible;
- Higher interest rates and fees;
- Debt circle with no end in sight.
How to Save Yourself from Financial Misery
By its very nature, the underground economy is hard to measure. The reason is that those who engage in it try to avoid detection, which makes official statistics unreliable. So if you struggle to find a formal job and can’t afford to take a loan, it’s better to avoid no income loan at all.
If you don’t have a legal position but have another income source, you can qualify for a no-income loan. But if only you are sure you can afford to repay it.
If you want the security of having a guaranteed paycheck coming in, get a job. Yes, in the start, it’s a lot of work. Sure, you won’t make a fortune overnight, but you could earn more and be in control of your life.