How To Get a Loan Without a Job

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If you find yourself unemployed or taking on side gigs for extra cash until you land another full-time job, you might consider taking out a personal loan to make ends meet. It’s possible to take out a loan without a job, but you may need to show proof of a steady income history through investments or 1099 gigs or have a co-signer.

Can You Get a Loan Without a Job? 

You can get a loan without a job, as long as you can show lenders proof that you’ll be able to repay the loan. Lenders will likely want to see the following:

• A good-to-excellent credit score
• Solid credit history
• Proof of a steady stream of alternative income

Should You Get a Co-Signer?

If you don’t have a steady source of income and a good credit history, you can consider getting a co-signer. A co-signer is someone who promises to repay the loan if you can’t. It’s a big risk for your co-signer, but if you are a trustworthy individual, a relative or close friend might step up and help you out.

What’s Considered Income?

Income can come from government benefits, such as unemployment, Social Security or disability, alimony or child support, investments or side gigs and 1099 income.

Types of Loans You Can Get Without a Job

While personal loans are a convenient way to borrow money, other options exist. If you don’t have a job, one of these choices might provide an easier approval process.

What Lenders Look for if You’re Unemployed 

Lenders are likely to evaluate your credit score and your past payment history if you’re unemployed and applying for a personal loan. Some things that might help your approval chances:

• On-time payments
• A high credit score
• Proof of other income, such as retirement or investment income, unemployment or disability benefits, or even alimony

If you have income, the lender will evaluate your debt-to-income ratio. That’s the amount of total debt payments — including mortgages, car loans, credit card debt student loan debt, and other debt — compared to your total income from all sources.

What if You Don’t Have Income?

If you don’t have any sources of income or a satisfactory credit score, the lender may require collateral in the form of savings or assets so you can qualify for a secured loan. Alternatively, you can ask a co-signer or co-borrower to help you qualify using their credit and income qualifications.

Good To Know

SoFi, a top-rated personal loan provider and fintech, might approve your loan if you have a job offer set to begin within 90 days.

Where Can You Get a Loan With No Job?

You may have other options to getting a loan without a job. Take a look:

Alternative Income Loans 

Some online lenders specialize in alternative income loans. These include lending platforms like Happy Money connects qualified borrowers, regardless of income, with lenders. Rates may be as low as 8.95% APR, with terms from two to five years.

P2P Lending

Similarly, peer-to-peer lending platforms like P2P Credit and Prosper often have less stringent lending requirements than traditional personal loan companies.

Credit Unions

Credit unions may also have more flexible lending requirements than banks. Credit unions also offer something called a Payday Alternative Loan (PAL). These loans are available to credit union members who have had their account for at least one month.

PALs range from $200 to $1,000, with terms from one to six months. They offer lower interest rates than payday loans and have a low application fee of $20 or less.

Community Banks

Community banks, like credit unions, may be more lenient in their loan qualifications, especially if you have a long history with the bank and a high credit score.

You may also qualify for a government loan without a job, especially if you need the money to recover after a disaster or want to start a small business. USA.gov has more details about the available programs.  

How To Improve Your Chances of Approval 

To improve your odds of loan approval, work on maintaining a good credit score. Make all credit card and existing loan payments on time, and try not to use your credit cards, that way you can reduce your overall debt.

It helps to show steady income, whether this is 1099 income from consistent gig work, government aid, or investments. You can also use savings or investments as collateral to back your loan, but keep in mind that you’re putting those assets at risk if you don’t make the loan payments.

If you have no other options, ask someone to co-sign for you.

Keep the loan amount low – only borrow the amount you need to get out of your immediate financial situation. Be willing to accept a shorter term and higher interest rate if it makes the difference between being denied for the long and securing the funds you need. Just make sure you can afford the monthly loan payments.

Alternatives to Traditional Loans When You’re Unemployed 

If you don’t qualify for a loan, you may still have other options to access cash for bills, groceries and other necessities.

Who Should and Shouldn’t Consider a Loan Without a Job 

A personal loan isn’t the best solution for everyone struggling to make ends meet if they don’t have steady income. Consider these before you apply.

Apply for a Loan If:

• You have consistent, non-job income.
• You have a way to repay the loan on time.
• You have a co-signer or a form of collateral.
• You have good credit — you’ll likely get a lower interest rate.
• You only need funds in the short term.

Don’t Apply for a Loan If:

• You have no income or a plan to repay the money.
• You’re already behind on your bills and can’t make monthly payments, since adding another bill to the mix won’t help.
• You would lose assets, such as your car or home. If you default, it’s not worth the risk.
• You’re considering high-interest payday loans out of desperation.

The bottom line? While it might be tempting to look to a personal loan as a solution to your financial problems, you run the risk of falling deeper into debt. Finally, don’t apply for a loan if you don’t understand the terms, fees, monthly payments and due dates or the penalties.

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