Personal loans are given to qualified borrowers, though requirements vary from lender to lender. Eligibility is typically based on employment (income), creditworthiness and other factors. But loans based on employment alone may put less weight or no weight at all on your creditworthiness. And, if you’ve just started your job and are worried if you’re still eligible for a personal 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 until 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.
| Lender | Minimum time employed (full time) | Minimum Credit Score | Interest rates (APR) | |
|---|---|---|---|---|
EarnIn | No minimum time employed, but must meet earning requirement | No credit score requirement | No fee | |
Achieve (formerly FreedomPlus) | Based on your employment start date | 620 | 8.99% to 29.99% | |
Cleo | No minimum time employed requirement | No credit score requirement | Free to $14.99 monthly | |
Credible | Not stated, varies by lenders, flexible options | Fair to excellent credit | 6.94% to 35.99% | |
Chime MyPay | At least two qualifying direct deposits | No credit score requirement | No fee | |
Brigit | At least three recurring deposits from the same source (including unemployment benefits). | No credit score requirement | Three tiers, free, $8.99 or $14.99 monthly membership fee |
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 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 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.
These may be referred to as paycheck advances from employers, payroll deduction loans or a loan on your pay stubs. Some companies offer these types of loans 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.
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.
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.
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.
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.
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.
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:
Income from your spouse may also be eligible, although it depends on your lender. If you’re unsure, check its requirements before you apply.
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.
Personal loans are a widely accepted way to prove your income when applying for a personal loan. However, with traditional business loans you may need to submit other documents such as proof of identity, proof of address, and in some cases loan purpose, credit checks and monthly expenses.
You may be able to get a loan based on employment not credit with cash advances and some installment loans. However, borrowing limits tend to be lower, and rates are higher with installment loans.
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