How To Get An Emergency Loan While Being Unemployed?
If you’re seeking an emergency loan while unemployed, chances are you find yourself in a difficult place. Lenders will typically require borrowers to provide a steady income.
Knowing you have a monthly income increases your ability to pay your monthly payments, and therefore makes you a stronger candidate to get financing.
If you’re looking for quick emergency cash loans when unemployed, you might still be able to secure a lending product. Keep reading to learn how you could qualify for this financing option and what steps you need to take.
Basic Requirements To Qualify For An Emergency Loan
Emergency cash loans for unemployed individuals come with some basic requirements that must be met. Remember that these loans only refer to how you plan to use the money.
It doesn’t refer to the type of financing, like secured or unsecured. So, the lender’s requirements will probably be the same whether you take out a regular personal loan or an emergency loan.
The main requirements are you must be 18 years of age or older and you must have a Social Security number. You’ll likely also need to have a residence in a state where the lender operates.
To better discern your credibility as a borrower, lending institutions will look at several factors. These include:
- Your full financial history
- Your credit report and score
- Your debt-to-income ratio
- Monthly income
- Debt payments
Every lender is different, so requirements may vary. Some establishments are looking for borrowers who have excellent credit, while others will still offer loans for people with poor credit (including emergency school loans for bad credit). Shop around and be sure to compare offers carefully.
What Is Considered As Income For An Emergency Loan?
Generally speaking, unemployment benefits aren't considered income for this type of lending product. This financial aid usually runs out after 26 weeks, therefore it’s considered temporary and not a regular, steady income.
The exception to this is if you’re a seasonal worker and regularly collect unemployment during the off-season. In this case, some lenders might consider your unemployment benefits as income.
Even if you don’t have a job, there are other income sources that a lending institution might accept as monthly income. These sources include:
- Child support or alimony
- The money you make from self-employed income
- Income generated from investments
- Rental property income
- Disability and Social Security benefits
- The money you generate from retirement
- Income from a pension or trust
There’s no set rule for what a lender will consider income. Each institution is different and therefore will have its own set of rules or systems for judging potential borrowers. If you reach a dead end with one lender, keep applying and try your luck elsewhere.
How To Apply For An Emergency Loan
Borrowers can typically apply for these loans online and get funds shortly thereafter, once approved. To apply for this loan, you’ll likely need to follow these steps:
- Check your credit score and history. The higher the rating you have, the more likely you are to qualify for better rates and terms
- Review the requirements of the lender. Keep an eye out for the minimal annual income requirement and see if you qualify
- If you can get pre-qualified for a loan with a soft credit pull. This is a kind of credit check that won’t affect your score
- Consider working with a cosigner on your loan. If you experience difficulty meeting requirements, ask a good friend, family member, or your partner to cosign. This increases your chances of approval since the lender will view you as a lower risk applicant
Emergency Loan Alternatives
Taking out a loan, especially when you’re unemployed, is serious business. Digging yourself into deeper debt or a tighter financial situation is something that you need to think carefully about.
Of course, if your loan is for a crisis, you might not have much of a choice. However, consider the following alternatives:
- Ask family and friends for help. This tends to be a less formal arrangement and can end up being much less expensive than a personal loan
- Check what your city or state offers for individuals facing a financial crisis. Explore various grants and support programs to see if you qualify
- Negotiation is an option. When it comes to your bills like utilities and even rent, ask for some relief or flexibility on your payments until you can get back on your feet
- Find out if you can get emergency unemployment. Check with your local city or state to see if you’re eligible for these benefits. If so, you’ll receive a check weekly
The need for emergency cash if you’re unemployed can feel extremely stressful and worrisome. Don’t let the urgency of the situation blind you and cause you to make a bad decision regarding your financing options. Take the time to do your homework and find the right lender for your needs.