Are loans for unemployed people ethical?
Well, it depends on the circumstances (in our view) but there are very good reasons why certain people who are unemployed, need a loan.
The classic scenario is this:
Person in a full time job suddenly find themselves out of work as the company they work for is cutting back in this awful credit crunch we are experiencing. The person leaves their job and starts hunting for a new role straight away but obviously, the job situation is as dire as the financial situation. They are still looking for a job 4 weeks later, just as their notice period comes to an end (and that means it is the last salary they will receive).
Suddenly, the bills start coming in and there is no way to pay them as there is still no job on the horizon. Christmas is coming up and there is no money for the kids presents and worse still, there isn’t enough money to buy fuel for the car to attend interviews. So, the mood in this particular household is going to be dire, what with a poor Christmas and no chance of a job.
If they took out a guarantor loan then they could attend those interviews and still have enough to buy their children’s presents which although it might sound frivolous, is actually hugely important for the mood and positive feeling that this will bring.
One last point….a loan for the unemployed should only be those people who are actively looking for work, not for those who do not intend working at any point (unless there is illness stopping them, etc)
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