From Redundancy to Recovery: How Loans and Credits Can Aid Your Job Search
By Space Coast Daily // March 16, 2023
Redundancy can be a stressful and challenging time for anyone. Losing your job can have a significant impact on your financial situation and mental health.
You may face difficulties paying your bills, managing your debts, and maintaining your lifestyle. You may also experience anxiety, depression, or low self-esteem as you look for a new job.
However, redundancy can also be an opportunity to explore new career paths, learn new skills, and find a better fit for your talents and interests. There are many resources and support available to help you cope with redundancy and find a new job that suits you.
One of these resources is loans and credits. Loans and credits are forms of borrowing money that can help you fund specific expenses related to your job search. For example, you may need money to pay for training courses, travel costs, interview outfits, or other tools that can boost your employability.
In this article, we will explore how loans and credits can aid your job search after redundancy. We will also provide some tips on how to use loans and credits wisely and responsibly for this purpose.
Benefits and financial support available for redundant workers
Before we dive into loan and credit options for redundant workers, let’s first look at some of the benefits and financial support that you may be eligible for if you lose your job due to redundancy.
Some of the benefits and financial support that you may be able to claim include:
- Universal Credit: This is a monthly payment that helps with living costs such as rent, food, bills, and other expenses.
- Jobseeker’s Allowance: This is a fortnightly payment that helps with living costs while you look for work. You may be able to get this if you are 18 or over, under the State Pension age, not in full-time education, available and actively looking for work, and working less than 16 hours a week.
- New Style Jobseeker’s Allowance: This is similar to Jobseeker’s Allowance but based on your National Insurance contributions. You may be able to get this if you have paid enough National Insurance in the last two to three years and meet the other eligibility criteria for Jobseeker’s Allowance.
- Statutory Redundancy Pay: This is a one-off payment that your employer must pay you if you have been working for them for at least two years and they dismiss you because of redundancy. The amount depends on your age, length of service, and weekly pay (up to a limit).
- Redundancy Pay: This is an extra payment that your employer may offer you on top of Statutory Redundancy Pay. The amount depends on your contract or company policy.
- Other benefits and financial support: Depending on your circumstances, you may also be able to claim other benefits and financial support such as Housing Benefit, Council Tax Reduction, Child Benefit, Child Tax Credit, Working Tax Credit, Pension Credit, Carer’s Allowance, Disability Living Allowance, Personal Independence Payment, Employment and Support Allowance, or Income Support.
These benefits and financial support can help you cover your basic living expenses and reduce your financial stress while you look for a new job. However, they may not be enough to cover all your needs or aspirations. That’s where loans and credits can come in handy.
Loans and credits options for redundant workers
Loans and credits are forms of borrowing money that you have to pay back with interest over time. There are different types of loans and credits that you may consider if you are a redundant worker looking for a new job. Some of them include:
- Personal loans: These are loans you can use for any purpose, such as paying for training courses, travel costs, interview outfits, or other tools that can boost your employability. You can borrow a lump sum from a bank, credit union, online lender, or peer-to-peer platform and repay it in fixed monthly installments over a set term. The interest rate and fees depend on your credit score, income, loan amount, and loan term.
- Overdrafts: These are extensions of credit that allow you to withdraw more money than you have in your bank account up to a certain limit. You can use them for short-term cash flow needs or emergencies related to your job search. You have to pay interest and fees on the amount you have overdrawn until you repay it. Interest rates and fees depend on your bank account type, overdraft limit, and usage.
- Credit cards: These are cards that allow you to buy goods and services on credit up to a certain limit. You can use them for flexible and convenient spending related to your job search. You have to pay at least the minimum amount due each month or the full balance if you want to avoid interest charges. The interest rate and fees depend on your credit card type, credit limit, and usage.
- Other loans and credits: Depending on your situation, you may also be able to access other loans and credits, such as payday loans, no credit check loans on which you can get approval today, guarantor loans, secured loans, home equity loans, car loans, or student loans. However, these may have higher interest rates and fees, stricter eligibility criteria, or more risks than the ones mentioned above.
These loans and credits can help you fund specific expenses related to your job search that may not be covered by benefits or financial support. However, they also come with costs and responsibilities that you need to be aware of.
Tips on how to use loans and credits wisely for job search
Loans and credits can be useful tools for your job search after redundancy if you use them wisely and responsibly. Here are some practical tips on how to do so:
- Budget carefully and prioritize essential expenses: Before you borrow any money, make sure you have a realistic and detailed budget for your income and expenses. Identify and prioritize your essential expenses such as rent, food, bills, debts, and savings. Cut down on unnecessary or discretionary spending such as eating out, entertainment, or shopping. Only borrow money for expenses that are directly related to your job search, and that can improve your chances of finding a new job.
- Compare different options and shop around for the best deal: Before you apply for any loan or credit, compare different options from different providers. Look at the interest rate, fees, repayment terms, eligibility criteria, and customer reviews. Shop around for the best deal that suits your needs and budget. Avoid taking out multiple loans or credits from different sources, as this can increase your debt burden and damage your credit score.
- When taking out a loan to fund your job search, be sure not to borrow more than necessary. Don’t let yourself succumb to the tempting amount of money available, instead, calculate how much you can afford by using either a loan or credit card calculator. This will provide an estimation of both how much you can reasonably take and what it’ll cost in terms of interest and fees down the road.
In conclusion, redundancy can be a challenging time, but it can also be an opportunity to explore new possibilities and find a better fit for your skills and interests. Loans and credits can provide financial support and flexibility to help you achieve your job search goals, but they also come with risks and responsibilities.
With careful budgeting, comparing options, and borrowing only what you need and can afford to repay, you can use loans and credits wisely and responsibly for your job search after redundancy.
Remember to also take advantage of the benefits and financial support available to you, seek advice and guidance from relevant organizations, and take care of your mental health and well-being during this transition.
And, if you have patience, persistence, and positivity, you can turn redundancy into recovery and find a new job that brings you fulfillment and success.