Personal loans for new employees

If you’ve just started your job and need a loan, options exist. While you need to show you’ll receive income during your repayment period, many will work with you as long as you’re employed — or have a job offer letter in hand.

Online lenders, community development financial institutions (CDFIs) and even your employer can be great sources of financing when you’re just starting a job. And if you need a few hundred dollars to tide you over till your first paycheck, a cash advance might offer the fastest, lowest-cost option.

Legally, lenders aren’t allowed to reject loan applicants based on the type of income they receive. So if you regularly get income from outside of your job — such as child support – that can help your chances of approval. Either way, you still might pay a higher interest rate than someone who’s been at the same job for a while. Consider all your options to find the best offer.

8 top lenders that offer loans to new employees

• SoFi's terms and conditions

  Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.
  Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.
  Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
  Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

Where to get a loan as a new employee

While most types of lenders offer loans to people who recently started a job, a few are particularly friendly to new employees. Which you choose depends on your career, how much you need to borrow and your income before starting your new job. Here’s a closer look at the different options.

Online lenders

• Best for: Anyone with an established career in a high-paying industry.

Online lenders tend to be more flexible than banks when it comes to extending loans to new employees. Some online lenders have no minimum time on the job requirement and may even extend loans to recent graduates – provided you have a start date and job offer letter.

However, your chances of getting a personal loan is higher if the job is in a field you’ve been in for a while, as opposed to making a career change. But as long as you can prove you have a regular source of income – or will soon – you could get approved.

Cash advance apps

• Best for: Small advances on your first paycheck — especially if you just left your previous job, received a severance package or qualified for unemployment.

Cash advance apps are a good way to borrow small amounts before payday – usually $20 to $250. Some apps, like Even and B9, allow you to access 50% to 100% of your paycheck. But you need to be employed and establish a history of regular payments with the app.

For example, with Brigit, you need to have three recurring from the same employer or deposit source to use Brigit — but this includes any source of regular income, including unemployment checks or severance pay if you were laid off. Brigit and other apps access your bank account and sometimes your work schedule to verify your income.

Paycheck advances from employers

• Best for: New employees who work for employers that offer this benefit.

Some companies offer paycheck advances as an employee benefit by partnering with a company like PayActiv or HoneyBee. You may also be able to apply for a paycheck advance or get your entire paycheck early through your employer’s accounting software. Research your company’s policies to find out if they’re offered. But keep in mind there may be limits on what you can borrow — and you may need to provide a reason.

CDFIs

• Best for: New employees at small businesses that serve their community.

Community development financial institutions (CDFIs) specialize in offering financing for low-income borrowers and underserved communities. For example, Spring Bank partners with local businesses to offer small personal loans to their employees at discounted rates. But check the requirements before you apply for a CDFI loan. They might not be available until after you’ve worked for your employer for a few months.

Medical residency and relocation loans

• Best for: New medical residents

This type of private student loan allows you to cover the cost of relocating for a medical residency or fellowship, with low repayments during the term of your program. For example, the Sallie Mae Medical Residency and Relocation Loan offers funds to pay for moving costs and travel that otherwise wouldn’t be covered by a typical student loan.

These tend to have lower rates than personal loans — especially for residents who haven’t started working yet. But beware: Repayments will increase once your residency or fellowship ends.

6 tips to increase your chances of approval as a new employee

If you’ve just started a new job or are about to start working, keep these five tips in mind to help improve your chances of getting a personal loan.

1. Contact the lender. Call the lender’s customer support line to find out what the lender expects in addition to the application, which could improve your chances.
2. Check your credit. Check your credit report and correct any mistakes. You’re entitled to one free report per year from Experian, Equifax and TransUnion.
3. Apply for a lower amount. Beyond saving you money, only requesting the minimum amount you need to borrow helps increase your chances of approval.
4. Pay down debts. Lowering your credit utilization ratio can up your credit score and make you more attractive to lenders. Some lenders also have rules on how many personal loans you can take out at once.
5. Disclose your assets. If you have any assets or savings, you should provide that information with your application to increase your chances of approval.
6. Let your employer know. Give your employer a heads-up beforehand in case the lender calls to verify your employment and income.

Can I get a loan with a job offer letter?

Yes, it might be possible with a lender like SoFi or Upstart, which only requires you to have a start date in the next 90 or 180 days, among other requirements. This could help you qualify for a larger loan amount, since you have proof that your salary will increase.

How to get a loan as a temporary or gig worker

While lenders prefer to work with full-time employees, freelancers and gig workers can still qualify for financing — as long as your income is relatively consistent. Some apps, like Giggle Finance and Coverr, specialize in small-dollar financing for independent contractors and 1099 workers.

However, it may take longer for lenders to process your application — verifying your income takes more than a glance at a pay stub. And if your income changes dramatically every month, you might not qualify for a competitive rate, if you qualify at all.

Alternate forms of acceptable income to get a loan

Not all income has to be from employment. If you have a regular source of income, a lender may still consider you for a loan. According to the Equal Credit Opportunity Act (ECOA), lenders can’t discriminate against the type of income you receive – for example, from public assistance or child support – as long as the payments are consistent.

Acceptable income sources for a loan include:

• Part-time or gig work
• Alimony
• Child support
• Dividend payments
• Pensions or retirement accounts
• Public assistance
• Social Security benefits
• Tips or royalty payments
• Unemployment benefits
• VA benefits

Income from your spouse may also be eligible, although it depends on your lender. If you’re unsure, check its requirements before you apply.

How do I get a personal loan without pay stubs?

You can get a personal loan if you don’t have pay stubs by looking for a lender that accepts bank statements or other proof of employment instead. Pay stubs are the easiest proof of income, but most lenders will accept other documents.

For example, bank statements showing proof of income may be enough if you don’t have a pay stub. And many online lenders and cash advance apps will connect to your bank account directly to verify funds.