Can You Get A Personal Loan If You Are Unemployed?
Individuals become unemployed for a variety of reasons. For some, they lost or were fired from the job while others may be unemployed due to retirement or other extenuating circumstances. Of course, without a regular income, many fear that they’ll be unable to gain access to the crucial funds that they require.
Whatever the reason for your unemployment, it might still be possible for you to secure a loan. Keep reading to learn how to get a loan without a job and the risks associated with loans without a job.
Factors Lenders Consider Before Approving Your Loan Application
When a lender receives your loan application, they’re going to look for a few important factors. They’ll base their offers, as well as terms and fees, on how qualified you are as a borrower. These factors are used to determine your ability to pay back the loan in the agreed-upon time. A lender will consider the following before approving your loan application:
- Credit score: Your credit score demonstrates your past ability to make payments on time. It helps lenders gauge your future ability to do so as well. Some lenders will even require you to have a specific minimum rating to qualify for a loan
- Credit history: If you have a credit history of missed payments or delinquent loans, the lender is less likely to consider you as a strong candidate for the loan
- Income: A lender will want to see regular income flowing into your account each month to show a strong foundation of your financial ability to meet your loan payments each month. This is where getting a no income loan becomes tricky
Are Alternative Income Options Considered?
Loans for unemployed people do exist. Although, you might have to prove an additional source of income. Depending on the individual, approved additional sources of income can vary widely and might include:
- Social Security benefit payments
- Your spouse’s income
- Interest or dividend payments that are reoccurring
- Income from disability
- Retirement benefit payments
- Benefits for veterans
- Child support
- Government annuity payments
- Pension funds
- Proceeds from a trust, though these would need to be regularly occurring
If you happen to have pending or access to a significant amount of cash, this might be sufficient for a lender to approve you. Access to cash might include an inheritance, a pending employment offer, or a property's pending sale.
Risks Involved In Getting A Personal Loan Without A Job
Loans with no job aren’t without risk. If you need a loan, there’s probably no magical fix for instant loans for the unemployed. You’ll need to work harder to prove you can handle the repayments and adhere to terms. Risks might include:
- Higher interest rates: If your income is low or non-existent, then you’ll likely be subjected to higher interest rates on your loan, which add to the overall cost of the loan
- Shorter repayment term: If a lender considers you to be a weak borrower, they might still agree to give you a loan, but it might have a shorter repayment period. This is because the lender doesn’t expect your financial situation to change
- Missed payments: Missed payments can have detrimental effects on your credit score and overall financial well-being. Getting a loan without steady incomes puts you at a significantly higher risk to not be able to pay the debt back
Best Places To Get Personal Loans Without Employment
The first place to look for a personal loan when you’re unemployed is likely your bank. This is because you might have an established history with that bank, which can work greatly in your favor and help prove your credibility.
Another place to secure a loan without a job is a credit union, though you’ll need to become a member of that union before funds can be released to you.
Personal Loan Alternatives
If you’re wondering how to get a loan with no job, your best bet might be to pursue an alternative. Consider the following:
These options could provide you with the cash you need if you’re unsuccessful at securing a loan without a job. Don’t forget to do your research on their risks and consequences as well.
Can you get a loan without a job? The answer is yes. If you’re unemployed and need a loan, you’re not without options. With a little creativity and extra effort, you might still be able to secure the financing you need.