How To Get a Loan Without a Job: Best Options and Tips for Approval

If you’re without a job and need cash, you might be wondering, “How to get a loan without a job?” While challenging, it can be done. Here’s what you should know. 

Can You Get a Loan Without a Job?

Yes, you can get a loan without a job. Lenders are more concerned with your ability to repay your loan. You can show proof of financial stability to get approved. 

Some lenders will allow you to use alternative income sources.

How To Get a Loan Without a Job: Accepted Income Types

Here is a breakdown of what alternative income sources will work: 

What Lenders Look for If You’re Unemployed

It is possible to get a loan if you don’t have a job. Lenders will look for alternative income sources as outlined above to determine your ability to repay the loan. Make certain that for any alternative source you offer, you have the documentation to prove you’re receiving money. 

Lenders will also likely look at your credit score and history. If you have good to excellent credit, it shows that you’ve been reliable about paying your bills. Lenders can pair the alternative income source with your good credit to judge your creditworthiness. 

If you’re seeking a secured loan — a loan that is backed by collateral — the lender will look to the asset you provide as a guarantee. If you aren’t able to repay the loan, they can seize your collateral to lower their loan risk.

Finally, if you have a cosigner with a steady income, this can help the lender feel more secure in lending you money. 

6 Best Loan Options If You Don’t Have a Job

If you don’t have a job, what are the options available to you? Here are six different options to know: 

1. Personal Loans

• Definition: A personal loan is typically an unsecured loan where the lender gives you money without having an asset as collateral. 
• What the lender looks for: The lender will likely look at your credit score and financial history. This loan is riskier because it is not secured by collateral. 
• Is approval likely? Depends. Approval will depend on your alternative income source as well as your ability to repay. 

2. Secured Loans

• Definition: In a secured loan, the lender lends you money while you offer an asset in exchange. The asset can be a car, home or other valuable collateral. 
• What the lender looks for: The lender will look at the collateral offered as well as your credit history. 
• Is approval likely? Likely yes. A secured loan is less risky for a lender since they can seize the asset if you default. Typically the interest rate is lower.

3. Cosigned Loans

• Definition: A cosigned loan is a loan where another person (the cosigner) agrees to take equal responsibility for repaying the debt if the primary borrower can’t.
• What the lender looks for: The lender will look at documentation regarding the cosigner. 
• Is approval likely? Likely yes. A cosigner with steady income improves approval chances. The cosigner is responsible for the loan if you default.

4. Payday Loans  

• Definition: A payday loan is a short-term, high-interest loan typically due on your next payday. 
• What the lender looks for: The approval is relatively quick with no credit checks. 
• Is approval likely? Likely yes. But you should use these loans with caution. Typically there are high interest rates and short repayment terms. 

5. Credit Card Cash Advances

• Definition: A short-term loan from your credit card, allowing you to withdraw cash.
• What the lender looks for: The lender is not involved since you’re borrowing against your credit card. 
• Is approval likely? Yes. However, you are borrowing against your credit card limit. The fees are high, and there is immediate interest accrual. This can be a costly method to get cash. 

6. Borrowing From Family or Friends

• Definition: This is money that you borrow from your friends and family. The agreement will be between you and family or friends. You will be responsible for working together on agreed-upon terms.  
• What the lender looks for: The lender is not involved. 
• Is approval likely? Yes. Make certain you set clear terms to avoid conflicts. 

Secured vs. Unsecured Loans Without a Job

How do secured and unsecured loans stack up against one another? Take a look at this chart to compare: 

Getting a Loan Without a Job: Pros and Cons

Want to know how to get a loan without a job and still make a smart decision? Consider the following pros and cons before applying.

Pros

• Opportunity to provide emergency funds. Getting a loan can help you bridge the gap when you need emergency funds. 
• A chance to rebuild credit. If you are timely with your payments, you have the chance to rebuild credit. 
• Lenders will offer you a chance. Certain lenders will help you by accepting alternative income sources. These sources can be freelance work, benefit income or a spouse’s income. 

Cons

• High interest rates. The lender is taking a risk by lending you money if you don’t have a job. As a result, interest rates will be higher. 
• Harder to qualify. Getting a loan without income or collateral may be a high bar for lenders, and there is a likelihood your loan application will be denied. 
• Increases your debt. You will have to take on debt accumulation and additional financial strain. 

5 Tips To Improve Your Chances of Approval

What can you do to increase your chances of getting your loan approved? Here are a few strategies: 

Tip 1: Show Proof of Alternative Income 

If you have a side hustle, this counts as income. If you’re receiving money through freelance work, passive income or benefits, you can show that as income to your lender. 

Tip 2: Apply for Secured Loans if You Have Assets

If you have assets, applying for a secured loan can help improve your chances of getting a loan without a job. 

Tip 3: Improve Your Credit Score Before Applying

Check your credit score on AnnualCreditReport.com or your bank app to see where you stand. If you want to improve your credit score, you should do the following:

• Pay your bills on time.
• Dispute any errors.
• Have a good credit mix.
• Keep your credit utilization low.

Tip 4: Consider a Cosigner to Strengthen Your Application

Having a cosigner can help your application. If your cosigner has a great credit score, you can benefit. 

Tip 5: Borrow Only What You Can Realistically Repay

Be mindful of what you can afford and can repay. Make sure you devise a budget to find out what amount is feasible for you. 

Final Take: Should You Get a Loan Without a Job?

If you’re exploring how to get a loan without a job, it’s absolutely possible — especially if you can show consistent income, offer collateral or apply with a cosigner.

For best results, shop around to find lenders with the best terms for your needs, and also seek out those that allow cosigners just in case. Avoid high-risk loans with excessive interest rates. Try to choose the lowest-cost option with a clear repayment plan.