How to Get a Loan Without a Job (And With Bad Credit)
Unemployment is one of the biggest problems in America right now. With people losing jobs left and right, it’s hard to find a legit source of income to stay afloat.
The Bureau of Labor Statistics listed a 3.6% unemployment rate for May 2019. This represents 5.9 Million Americans in the workforce, which can be disturbing.
If you’re one of the unemployed, you’re wondering where can you get the money you need. You would want to know how to get a loan without a job.
In this guide, we’ll walk you through ways on how you can get a loan without a job. We’ll teach you ways of processing a loan without a job, who to talk to, and what loans you can get.
We’re hoping these can help you get a fresh restart and keep the lights on as long as you need it.
Here’s how you do it:
1. Understanding How To Get A Loan Without A Job
“Can I get a loan without a job?”
This is the first thing that comes to mind when you think about loans. In traditional and online financial loans, money lenders want borrowers that can pay. This is the reality of the situation and it’s unlikely to change any time soon.
Even then, the answer is yes! Yes, you can take a loan without a job. Sure, having a consistent source of income is a great position but this is not the only criteria.
There are other ways to prove your worthiness as a borrower. This tends to be a trio, which are:
- Alternate income sources
- Credit history
- Credit score
The value of each one changes from lender to lender. Here’s why they’re important when you try to get a loan without a job:
Alternate Income Sources
Alternate income sources are crucial criteria when you are trying to find a loan without a job. Even if you are under unemployment, you need to show you can do loan payments.
There’s a long list of alternative sources of income. The point is that you want to show you can pay your creditors back. We all know lending is not charity, so people need to see you can pay off their investment in you.
Credit history is great evidence that can help you get loans. Lenders would want to make sure how you paid your dues in the past. If you pay on time before your mishaps, it can help a great deal.
Even then, there are lenders who give people a loan without a job. They even approve of those with bad credit history as well! You want your history to be as squeaky clean as possible but it’s hard to do that.
There are different circumstances for every person. You might be a good person with some bad luck that came your way, hence your bad credit history. There’s still a way you can remedy this.
The third criterion that lenders look at is your credit score. In essence, a good credit score can help you when you’re outside the workforce. This is the likelihood of you paying your loans back, so keeping a great score helps.
Much like credit history, however, there are ways to get a loan without a job and a bad credit score. Traditional financial institutions will have a problem if you have a bad score. Many lenders, however, will have specific credit structures designed around this.
2. Solving Alternate Sources of Income
So, how to get a loan without a job? The answer is not as simple. Emergency loans with bad credit aren’t so simple.
First, we need to answer the problem of alternative sources of income.
Whether you have no job or bad credit score, any lender will ask for an alternative income source. You need to show you can pay them back no matter the way.
Since you are under unemployment now, your money lenders will review your financial records. Other types of income to get a loan without a job includes:
- Social security
- Veteran’s Benefits
- Pension Fund
- Housing Income
- Spouse’s or Partner’s Income
- Government Annuity
- Cash on hand
- Capital gains on investments
- Disability income
- Unemployment benefits
- Retirement fund
As you can see, you have different possible sources you can use. For those who are doing freelancing on the side, you can also look for ways to prove you’re earning money. These can be your income tax returns or bank statements.
At the very least, you can show off your bank activity. Show off your Paypal or other cash transfer activities as evidence you have the money.
3. Can Collaterals Help Me?
Another way that you can loan without a job is to use what we call secured loan collaterals. Secured loans are credits that are under the guarantee of collateral. These collaterals come from the borrower’s current valued assets.
Depending on the loan type and asset, a secured loan can get you enough to start over. Your assets need to have their values put under proper appraisal.
So, which assets can help you? If you want to get a loan without a job, your limits are:
- your home
- your car
- your current stocks and investments
- your savings account
Your money lender will give you a loan value that justifies the use of these assets as collaterals. Here’s how you can use them.
Home or Mortgage as Collateral
If you own a house or real estate, that’s prime collateral right there.
Real estate properties are the most common collaterals for taking a loan without a job. They have solid value and it’s easy to convince lenders with them. This is why homes tend to go under repossession when borrowers default on their loans.
You can also use a home equity loan or a refinanced mortgage loan to use as collateral.
Automobile as Collateral
Your automobile is another product that you can use as collateral. Many car loans, in actuality, are secure loans using the vehicle’s value as the collateral. You are not under the limits of a normal vehicle either.
If you have boats, cars or heavy equipment, these are valid to use as collateral for a loan without a job.
Savings As Collateral
Many banks offer what we call a savings-secured or certificate-secured loans. These are loans that use your current savings as collateral.
If you need a quick cash out, this is a great option. It also allows your deposit to grow under interest even if you’re under the pretense of a loan.
Stocks as Collateral
Stocks and investments tend to have dwindling value, but there is value all the same. Securities-based loans or stock-based loans tend to be options on offer by banks and brokerage companies.
Many money lenders will allow a credit extension up to how much your investment’s value.
4. What Are Cosigner Loans
Let’s say you’re in your worst case scenario. You have nothing for collaterals and a paltry alternative source of income. What do you do to get a loan without a job?
You get a cosigner.
A cosigner, known in many circles as a guarantor, is someone who signs a loan with you. These people cosign that, in the event that you can’t pay on time, that they will pay out of pocket.
Cosigner loans tend to be problematic. In many regards, asking someone to share a loan with you can cause undue tension. If you’re asking a partner, friend or family member, you can expect anxieties if you can’t repay.
Even then, if you have a plan that is within arm’s reach but need a loan without a job, consider it. Explain to the cosigner your plans.
5. Why Online Personal Loans and Payday Loans Are Your Best Option
So, how can you get a loan without a job? There are a few ways to do it.
First, there are loans without a credit check. These tend to be online loans that don’t try to check for your credit history or credit score. These personal loans use their own factors to determine if you are eligible.
Most of the time, online loans are the best loans without a job. Their criteria tend to be minor details like:
- Age 18 or above
- Must have an active US bank account
- No outstanding personal loan
You also need to remember that proof of a regular source of income is mandatory. Whatever happens, this is the most crucial part of borrowing money. Sure, you may have a bad credit score, but you need to show you can do repayments.
There are also bad credit payday loans. You want to take these when you have a big emergency that you need to take care as soon as possible. They tend to be a type of cash advance that you pay with an upcoming salary.
How do you take advantage of these? This is best for people who need to last for another month or two until they get their money from their salaries. This can be your severance package or from your new job.
6. The Risks of Borrowing Without A Job
There are many great ways on how you can get a loan without a job. If you have choices, however, it’s best for you to be cautious when doing so. Depending on the financial institution, you will see some downsides when you take a loan without a job.
They have a good reason to give you these downsides as well.
First, lenders are taking a risk of getting back money you don’t have right now. They need to create many restrictions to make sure you don’t feel the temptation to default.
Here are a few things you want to remember when getting no income personal loans.
Shorter Repayment Terms
The first thing you need to look at are the repayment terms. Many money lenders will do their best to mitigate the risk of loaning you the money you don’t have. Since you don’t have an income to assure a longer repayment, here’s what happens:
When you get a loan without a job, you will find out you have shorter turnarounds. This tends to result in loans with shorter repayment periods. You will get the funding you need but you need to pay them faster as well.
This is why it’s best to consider a loan without a job if you have plans soon. If you find a new job, you likely need something to start with. If you only need some finances to last you for a short time, go for this loan.
Automatic Loan Payments
Many moneylenders would want to set up an automatic payment option for your account. If you get a loan without a job, chances are you have other income sources. When this happens, the automatic payment is a way to keep you honest with your finances.
Automatic payments are payments where your lenders will incur an automatic charge to bank accounts. This can also happen with your other income sources. This means that every pay period, they get their charge first.
This is nothing you should worry about.
If you have enough to cover your loan, this should not be a problem. This only becomes problematic the longer your unemployment lags on.
This is the reason why having a plan to pay off your loan matters. You need to do a loan without a job only if you have a proper exit strategy. If you’re using loans to cover your other loans, the cycle will be endless.
Hefty Interest Rates
Much like any financial institution, any high-risk loan investment will meet hefty interest rates. It’s a part of the risks that you take when you get a loan without a job.
High-interest rates for loans is a way for the financial institution to protect themselves. Again, any banking institution will do the same if you are a high-risk customer. This ensures that they will get their money back, and fast as well.
Whether we admit it or not, there are businesses out there who take advantage of the desperate. People who want a loan without a job tend to bite on predatory lenders. By giving offers of money for extreme interest rates, absurd repayment terms, and hefty extra fees, they can dig you a deep debt pit.
This is why you need to talk with a money lender you can trust. You want to make sure that the business has the trust of thousands of people. Check their terms and conditions and compare them with others as well.
How To Get A Loan Without A Job?
How to get a loan without a job? There are several options that you can take. From payday loans, personal loans to secured loans, you have a myriad of options that fit your current situation.
Apart from the type of loan, you need to look for a financing institute that you can trust. Why not try what we have to offer?
We provide different types of loans for different types of situations. From bad credit personal loans to online loans with no credit check, they have it for you.
Get in touch today and see how you can request a loan from a lending institution you can trust. Request your loan now.
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