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Where to find a personal loan during the coronavirus outbreak
Explore online lenders, banks and credit unions offering funding right now.
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Personal loans are a handy tool to tackle big expenses like debt consolidation and home repairs — expenses that don’t cease to exist during a national crisis. But you’ll have a hard time qualifying if you lost your job and don’t have a coapplicant you can apply with. In that case, you might want to consider non-borrowing alternatives.
Where can I get a personal loan during the coronavirus outbreak?
Many lenders have fully online applications that allow you to apply and receive funds without having to leave your home or call busy customer service lines.
Online lenders may be a good starting point if you’re looking for fast funding during the coronavirus outbreak. Many come with loan amounts upwards of $50,000 or even $100,000 with terms up to seven years. And they’re typically faster than traditional banks and credit unions — with many able to get you funds the day after you apply.
They often have more flexible eligibility requirements than banks, too. In fact, many lenders are able to use high-tech underwriting systems to consider unconventional factors like your education level and employment history when considering your application.
Also, because the entire process has always been online, you may run into fewer bumps and need to submit less paperwork than you would with a traditional lender.
Not every bank has a personal loan option, but those that do frequently allow you to apply online. With many branches shut down due to COVID-19, online preapproval makes it easy to see if you’re eligible.
You’ll need good to excellent credit to qualify with most banks — but because of this, you can expect a competitive rate that’s lower than what many online lenders can offer. However, these typically take longer to disburse your funds than lenders that work entirely online.
As nonprofit financial institutions that serve specific communities, credit unions are able to return profits to customers in the form of lower rates and fees on their personal loans and other financial products. They’re also typically more open to working with borrowers with less-than-stellar credit. But you’ll likely need to apply in person, and it usually takes longer to get your funds.
If you only need to borrow a small amount, many credit union also offer payday alternative loans (PALs). These short-term loans come in amounts up to $1,000 with rates capped at 28% for borrowers with poor credit. However, you need to be a member of the credit union for at least a month to qualify.
Can I qualify if I lost my job due to the coronavirus?
Probably not — most lenders require you to provide proof of income to qualify. However, you might be able to apply with a coapplicant who has good credit and a steady source of income if your lender accepts joint applications. Just keep in mind they’ll be on the hook for repayments should you become unable to pay.
3 alternatives to borrowing if you lost your job
If you don’t have a coapplicant you can apply with and you lost your job, here are a few alternatives to taking out a personal loan:
- Look into assistance from local charities. If you’re struggling to pay rent, utilities or cover home repairs, reach out to local homeless shelters, charities or other nonprofits in your area. They might be willing to cover those expenses until you’re on more solid financial ground.
- Find a temporary job. While many nonessential businesses are temporarily closed, a slew of companies are hiring short-term employees to meet the rising demand for food, household essentials, online learning and more.
- Withdraw from your retirement account. Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, you can withdraw up to $100,000 from your 401(k) or IRA without paying penalty fees for early withdrawals.
You have a few places to turn to for a personal loan during the coronavirus pandemic — from online lenders to banks and credit unions. However, you might want to explore other options beyond borrowing if you recently lost your job and are worried about handling repayments.
Frequently asked questions
Common questions about getting a personal loan during the coronavirus outbreak.
What should I do if I can’t afford my personal loan repayment?
Contact your lender if you’re unable to make repayments. Even if your lender doesn’t have specific help for people facing job loss or illness due to COVID-19, it will likely have options for people experiencing financial hardship — including:
- Payment deferment
- Waived fees
- Extended repayment terms
- Flexible payment arrangements
There are also a number of programs designed to provide financial help during the coronavirus outbreak like state-based aid and help with mortgages.
Can I qualify for a personal loan if I’m self-employed?
Maybe — some lenders are willing to work with self-employed borrowers, though you typically need to submit more documentation to prove your income. The Small Business Administration also reopened the Paycheck Protection Program (PPP) in January 2021. You can apply for a PPP loan until March 31, 2021.
You can learn more with our freelancer’s guide to weathering the coronavirus outbreak.
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