As more than one person has complained, the bank will only lend money to people who can prove they don’t need it. From their perspective, this makes sense: a borrower who can’t repay the loan is a massive loss for them.
If you’re stuck without a source of income, however, you’re probably not full of sympathy for them: emergencies happen when they want to, often making it necessary to borrow some money. Is it possible to get a loan without a job? Do other sources of income count when getting a loan? How does your credit history figure into all this? How can you improve the chances of your loan application getting approved if you don’t have a job?
The good news is that it’s indeed possible to get a loan while unemployed. The bad news is that you’ll have fewer good options without a source of income – in particular, instant loans for unemployed people carry high-interest rates.
Where can You Find a Loan for Unemployed Individuals?
Even if you don’t have a job, you can still approach banks as well as less traditional credit companies about getting a loan. Being approved without a job is far from guaranteed, though. If you’re looking for an unsecured personal loan rather than putting up collateral such as your car, you can assume that your credit report will be scrutinized very carefully. A long track record of using credit responsibly will help a lot.
For the most part, at least when talking to a bank, you will still have to show that you have one or more sources of income, even if you don’t have a job. Some examples of these include Social Security payments, child support, and – at least for small, short-term loans – unemployment benefits. Different financial institutions have other policies on what types of personal income they’ll consider when you’re applying for a loan without a job, so be sure to compare several options.
If you lost your job unexpectedly, you might still receive a regular income from investments. This is probably the easiest way to get a loan for the unemployed who have some assets and probably a pretty good credit score, even if they need a personal loan to tide them over temporarily. Should they be unable to repay the loan using this income, they can at least clear it by selling stocks, property, or some other investment, thereby avoiding harm to their credit report.
What Other Factors Could Help with Your Loan Application?
Even if you don’t have a job right now, you’re probably hard at work scouting out new opportunities. Credit scores may be less critical to the bank if you can prove that you’re actively job-hunting and getting interviews, especially if you can show them a tentative offer. Income from a business or side hustle is a little more difficult for the bank to evaluate, but it is still worth mentioning, especially if you can show regular earnings for the past several months.
You can also consider finding someone with a better credit score to co-sign the loan. This makes it possible for almost anyone to get a personal loan while they don’t have a job, but it isn’t something you should do on a whim. Co-signing means that they’re on the hook for all repayments if you fail to make them, meaning that they’re placing their credit history on the line to help you.
Can I Get a Personal Loan with No Bank Account?
Even if you don’t have a job, getting credit is much more comfortable with a bank account. The reason for this is as follows: bank accounts help to build credit scores, as well as giving you an existing relationship with a bank that may offer personal loans. It also serves as a dependable proof of your address and identity: if a lender knows where you can be reached, they’ll feel more secure about giving you a loan without a job.
If you can’t open an account, you still have some avenues open to you. Many lenders, especially online, cater specifically to people in unusual circumstances. Some, for instance, are willing to forego a credit check as long as you have proof of income. There is a catch, unfortunately: people without bank accounts are more significant credit risks, statistically speaking. This means that lenders willing to service them typically charge high-interest rates, which makes missed payments or default more likely. Both of these will harm your credit score.
If you have an asset to use as collateral, you can also look into non-bank, secured types of credit like a car title loan, and even pawning something you don’t need. These are expensive forms of credit; if you meet the requirements, you’re far better off joining a traditional lender such as a bank or credit union even if you don’t currently have a source of income.
Alternative Ways to Get a Loan While Unemployed
If you have a credit card, you can request a cash advance as an emergency measure. You’ll want to be very careful with this, though: the interest you have to pay can pile up very quickly if you don’t have an income to keep up with the payments. Alternatively, you can approach someone who knows and trusts you for a temporary loan.
Can’t think of anyone who’d be willing? You can also turn to the internet for something very similar. With peer-to-peer lending, a low credit score is not always a dealbreaker, and you may not have to pay interest at all. You guarantee that you’ll pay back the stranger who lends you some money, typically $100 to $500. If you’re scrambling to find a source of income, this may be enough to get you in business for yourself.
If you’re willing to make a significant change and pursue a new career, or up-skill yourself to improve your chances on the job market, you can also try applying for a student loan. These typically allow you to use part of the money for living expenses, though you’re restricted in terms of what else you can spend it on. Depending on where you live and what kind of higher education you want to pursue, you may also be able to call on Uncle Sam. Both the federal and state governments provide grants and loans for retraining workers who have lost their jobs. Especially with unemployment figures being what they are right now, it’s unlikely that these will cover your entire tuition, but could help improve your long-term prospects if you have some money saved up.
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Right now, as many as 30 million Americans are unemployed, many of them through no fault of their own. While there are no easy answers to the dilemma facing them, they don’t need to suffer: there are some emergency loans they can use to tide themselves over.
It’s essential, however, not to bite off more than you can chew. Make sure to shop around for the best deal – there are online tools that make this easy. Keep an eye on interest rates, but more importantly, borrow only the smallest amount that will allow you to get by. Once you realize how many lenders are willing to work with you even if you don’t have a job, applying for a considerable amount may be tempting. Keep in mind that you don’t know how long unemployment may last – taking on a lot of debt without an income can turn out to be a trap.
It is very difficult to get some loan if you are unemployed. The banks offer loans to people who have a regular income so pursuing them for a loan may be a dead end. And in the situation like these where the rates of unemployment are high and people are losing their jobs every day it can be an impossible mission. And we only have to hope that the unemployment won’t last to long and getting pursuing new job immediately. Hopefully there some small loans that can get us through this period or we will have to turn up on our savings if we have some. Of course there are some online options that we can turn to take some loans but I guess that we can use them only in emergency and try to avoid being in bigger dept that we were previously. When you get a loan or a credit card for example it is always tempting to spend bigger amounts of money which is not advisable in time like this. So try to lower the expenses at minimum and try to find some job immediately
Personally I am not a fan on taking some loans and trying to avoid them as much as I can. But doing some research online I was amazed by the fact how many agencies offer loans to help people who are unemployed or going through a rough period in their lives. Of course you will have to pay bigger interest rates and you will have to prove that you can repay the loan when it is due time, but at least it will get you through the period and you can stay safe and have for the essential living costs. On the other side you have to be very careful and read the fine print when signing a contract and to make yourself sure that the terms of the loan are suitable for you. Most of the people are so happy when they can get a loan so they forget and tend to finish it as fast as possible and later discover that some of the terms are not in their favor.
Yah it is very interesting to find out that some of your income is not good enough when wanting some personal loans and when you need them. It will cost you a lot of nerves to apply and then to find out are you eligible for a loan or not. It turns out that loans can get people who don’t need it. Sad but true. If you have bunch of income while unemployed why do you need a loan?
Definitely it is very difficult to get some loan if you are on the list of unemployed.
In the middle of the crisis with the pandemic and companies losing their business because of the social distancing and virus it is normal to be unemployed for some time. The problem is that more of us were not ready for this situation and only few of us have some savings that can get us through the crisis. However if you need some loans there are always some companies that you can find suitable for your needs. If not you can think of alternative ways of earning some money by doing some additional work or working online because at this moment the e-commerce and businesses online are the best. Or you can find some ways of doing some crafts at home and selling them online. And the amount you need to start your own business is not big. Also there are online tools that are free of charge and that will help you to start your own business. This way you will not into dept and be more efficient and earning some money in this crisis.
If you have at least some sources of income you can apply for a loan. Maybe the best option is to apply online because online lenders have quick application forms and they are as not detailed as banks. Of course it doesn’t mean that you will get approved if you do not fulfill minimal requirements to be eligible for a loan.
Thank you for the article. It is very well explained and all the ways are covered
For one you are right. You can apply for a loan only to get you to the emergency situation and to be sure that you can pay it on time whatever the interest rates are. And in the meantime you should try to find another source of income or work whatever you can find n order to pay the loan and have for life expenses. Everything else will get you in more dept that you will have to repay for years.
Maybe the best way to apply for a loan if you are unemployed is to start taking some freelance work which will boost you income and you will be more eligible to get a loan. As for the pandemic crisis and a lot of people and businesses losing work, the alternative way of earning is online. Whatever skills someone have there is always work that can be done.
Doing your own research when you need personal loan is very important. Different lenders offer different options with different interest rates terms etc. for someone source of income can be unemployment benefit, for someone it doesn’t. Just make sure you apply for the best that suits your needs and for one that you think you will be approved for a loan. And be sure to check all the terms and the payments so you won’t get into trap and instead of getting a loan to go to more dept. Asking for a cash advance on credit cards is also a good option and this way you will be covered for an emergency situation
I applied for a loan several times and I was always rejected for one or another reason. I really think that the best option is to borrow some money from friends in emergency and to repay them later.
If you want to start some education you can apply for some student loans that in this case will help you. But this student loans are difficult to repay and you will need years to get out from the dept you have burdened yourself. So be careful in whatever you are planning.
In my opinion the state doesn’t take care about the workers and people losing their jobs every day. The benefits for unemployed are too small to cover essential expenses. We now have families where both parents lost their jobs because of the coronavirus pandemics and they have children to take care of. So a loan of $500 dollars won’t help them if they have to pay credits and interest rates and in the mean time to feed themselves. It is a pity when someone thinks that a loan of $500 will help a family to survive and to be out of dept. But of course our politicians have to think about other stuff and not the workers and ordinary people. So you are on your own. If you cam manage somehow it is good for you. Otherwise you can find yourself out on the street.
If you have some “emergency fund” you are good to go and to get through any difficult situation. But to be quite honest with the current home expenses and the cost of life we are not able to save any money like our parents did long time ago. Most of the people are living on credit and losing the job will make them feel worse.
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