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Unemployed and need a loan? Compare lenders and terms
If you're worried you won't meet the employment requirements to borrow, find out about unemployed loans.
If you’re unemployed or recently self-employed and are in need of a loan, you may be wondering whether any lender will consider your application. This guide will take you through your options for borrowing while you’re unemployed, what you need to be aware of and how you can apply.
Can I get a loan if I’m unemployed?
Yes! Some lenders will consider you for a loan when you’re not currently employed, but you’ll need to be earning some form of income or have suitable income-earning assets to repay the loan. This could mean receiving welfare payments, being self-employed or receiving a regular deposit into your account from investments.
Often, lenders will require access to your banking history and financial documents in order to verify that you’ll be able to repay your loan.
Can you qualify for a short term loan with alternate income?
|ACE Cash Express||Must show proof of income.|
|Advance America||Must show proof of income, requirements vary by state.|
|CashNetUSA||Must show proof of income, requirements vary by state.|
|Cash Central||Must show proof of income, requirements vary by state.|
|Check City||Must show proof of income, requirements vary by state.|
|Check into Cash||Must show proof of income, requirements vary by state.|
|LendUp||Must show proof of income, requirements vary by state.|
|LendYou||Must show proof of at least $1,000/month income, requirements vary by state.|
|OppLoans||Must be employed for 3+ months and receive paychecks via direct deposit. New Mexico does not require direct deposit.|
Important things to consider before borrowing
- You need to be able to repay the loan. This is the main thing lenders look for when considering you for a loan. If you only want to borrow a small amount and your income and expenses demonstrate you can easily manage the ongoing repayments, then you may be eligible. If you want to borrow a large amount of money that will make it hard for you to manage day-to-day, then the lender probably won’t consider your application.
- Other requirements will need to be met. You’ll need to check the other eligibility requirements set by the lender before you apply. Just because they have flexible criteria when it comes to your employment doesn’t mean they’ll be flexible about everything else.
- Do you receive welfare payments? This is often what allows lenders to consider you for a loan when you aren’t currently unemployed. If you receive welfare payments as all or a portion of your income, lenders will consider this when evaluating your ability to repay the loan.
- Quick repayment plans. Like all short term loans, you must repay the principal and interest by your next payday. This is why lenders want you to be employed, but if you aren’t, an alternate source of income might be enough.
- High APR. Short term loans are known to have a high APR, meaning you have to pay much more in fees and charges than you would with a traditional loan from a bank.
- Automatic payments. While lenders like to list debiting directly from your bank account as a positive, if you don’t have the money to pay back your loan, it could lead to overdrawing–that means more fees.
On furlough due to the government shutdown?
The previous government shutdown in 2013 lasted 16 days, but the current shutdown is already longer. The shutdown will end after Congress approves this year’s budget and President Trump signs it into law. Find out how to get no-interest financing and other assistance during the government shutdown.
Lenders who may be able to approve you if you have alternate income
There are different loan options for people who are unemployed. Be sure to check the lender’s website or call their customer service line before applying to confirm the lender accepts applications from people who are unemployed.
What are the requirements for a short term loan?
The requirements differ depending on the lender and how much you’re looking to borrow. You’ll need to check the specific criteria before submitting an application, but any of the following might apply:
- Earn a specific income. While you may not need to be employed, you still may need to have a regular income to apply. This is a common criteria for personal loans, so if you’re receiving welfare payments or have investment income, be sure to list that.
- Your credit rating. Lenders are often able to look beyond negative marks on your credit report. Keep in mind that this flexibility has limits. For instance, you may be able to have a few late payments on your credit report, but a poor credit score could decrease your chances of being approved.
- Your assets. If you own a car or a boat outright or have some equity in a property, your application may have a greater chance of being approved. This is because the lender may use this as security for the loan.
- Not a member of the military. Consumer lending regulations protect military members and their families from unfairly high-cost loans, including payday loans. Learn more about your short term loan options if you’re a member of the military.
Case of study: Sarah needs a loan
Sarah has been out of work for three months after completing her degree and currently receives welfare payments. She can get a job as a sales rep, but the trouble is she’ll need a car to make it to work every day.
She has found a cheap car to purchase from a friend for $1,500. All she needs is a quick cash loan, which she’ll be able to comfortably repay using her welfare payments, and when she gets paid from her new job, the loan repayments will be even easier to manage.
Sarah compares her short term loan options and sees that there are lenders who will consider her welfare payments as income. After comparing what’s available and double-checking the eligibility criteria, she submits an online application and is approved for the loan amount of $1,500.
Her repayment dates are structured around when she receives her welfare benefits, and, after purchasing the car, she is offered the job as a sales rep.
How to increase your chances of approval
If you’re unemployed and in need of a loan, you might consider applying with another person–a partner, relative or friend–in order to boost your eligibility. Many lenders offer the option for joint applications, and some lenders even encourage you to apply with a guarantor in order for you to be eligible for a larger loan amount.
If you don’t meet the eligibility criteria, find out if you can apply with someone who does. However, this is a large responsibility the guarantor or co-signer is taking on because they’re sharing the responsibility for you repaying the loan.
You haven’t reached the end of the financing road just because you’re unemployed. If you’re able to manage your repayments with another form of income, there are lenders who will consider you.
Remember to compare all available options to get the best loan for your needs.
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