How to get a loan if you’re unemployed

Unemployment is the highest it’s been in over two years, according to 2024 unemployment data from the Bureau of Labor Statistics. While this might be a good sign for taming inflation, it can be tough to make ends meet when you don’t have a job. If you need to take on debt to do so, consider other options besides the credit cards in your wallet. Personal loans, for instance, have much lower interest rates, on average, and can be a lifeline if you’re short on funds.

Can you get a loan when unemployed?

It's possible to get a loan while unemployed.

While personal loan lenders require borrowers to have income, it doesn’t have to come from a full-time job. Each lender has different rules for what counts as income, but you may be able to qualify with unemployment income, especially if you have other income sources, such as rental income, child support and alimony, and self-employment income.

You may also be eligible if you receive income from a trust or pension, payouts from a disability insurance policy, or Social Security income. It may also be possible to qualify for a loan with an offer of future employment.

Some lenders have minimum income requirements, while others do not. A good or excellent credit score may help you get approved if your income is limited, but it won’t suffice if you don’t have any money coming in. If the lender allows cosigners or joint applicants, they’ll typically consider your cosigner’s or co-borrower’s income along with your own when evaluating your application. A secured personal loan can also help you get a loan or lower your rate.

Loans for unemployed people

Some lenders are more accessible to unemployed people than others. They may have lower minimum income requirements, allow cosigners, or offer secured loans that may be easier to qualify for. Based on those metrics, these are our top picks.

How to get a loan if you’re unemployed

1. Identify all sources of income

When calculating your income, consider any regular payments you receive from government programs (like unemployment), investments, rental income, disability insurance policies, alimony and child support, and retirement income, along with any self-employment income.

2. Research lender income requirements

Look for lenders that accept the forms of income you receive. If you plan to rely on your spouse’s income, you’ll need to find a lender that allows cosigners or joint applications with a co-borrower. Also pay attention to lender reputation, annual percentage rate (APR) ranges, and available repayment terms.

3. Go through the prequalification process

Most lenders allow you to prequalify for a personal loan without hurting your credit. The lender will run a soft credit check to get an overview of your credit, and will evaluate basic financial information you’ve supplied. If you’re likely to qualify, the lender will provide you with an estimated rate. 

Just note that prequalification isn’t a guarantee that the lender will offer a loan. If you go through the process with a handful of lenders, you can better compare personal loan rates and terms.

4. Consider applying with a cosigner or co-borrower

If you don’t earn enough income to qualify on your own, consider applying jointly with your spouse or asking a friend or family member who has good credit and steady income to cosign the loan. In either case, whoever helps you qualify will be on the hook for repayment. 

To avoid damaging their credit, make sure you can afford to make your monthly payments on time. Once you apply, the lender will conduct a hard credit pull, which could ding your credit score (and your cosigner’s) by a few points.

Check out: Best personal loans with a coisgner

5. Consider secured loans

Providing collateral for a loan lowers the risk to the lender, which can make it easier to qualify with a lower income or credit score. Collateral is an asset, like a savings account, vehicle, or your home, that you give the lender permission to take if you stop making payments. Most secured personal loans require a source of income, with the exception of some loans secured with your savings account.

6. Consider alternatives

You may already have tools at your disposal to make monthly expenses more affordable. For instance:

• 0% APR credit card: Do you have a 0% APR promotion on an existing credit card? If so, you could potentially use it to transfer high-interest debt to lower your payments, or use it for new purchases (if they’re eligible for the 0% rate). It’s crucial, though, to know when the low rate expires.
• Tax refund advance: Or, if it’s near tax time and you’re due a refund, consider a tax refund advance, which can get you early access to your refund.
• Cash value life insurance: If you have a cash value life insurance plan, such as a whole life or universal life insurance policy, you may have a cash value that you can withdraw or borrow from. Since the money belongs to you, you won’t need to qualify with income or good-enough credit. But make sure you understand how a withdrawal or loan impacts the policy to avoid potential tax consequences or lapsation.
• Roth IRA and 401(k) contributions: If you’ve made Roth contributions (after-tax) to a 401(k) or IRA, you can withdraw them at any time without penalty, even if you’re under 59 ½.
• IRA or 401(k) emergency personal expense: Note that you’re allowed to withdraw up to $1,000 from an IRA or 401(k) annually, for an emergency personal expense. You’ll owe income tax for withdrawals from non-Roth accounts, but can avoid the 10% penalty tax for early distributions.

Learn more: How to get a personal loan

Loan eligibility

To be eligible for a loan, you generally must:

• Be an adult with an SSN and a bank account: Most lenders require that you be the age of majority in your state, be a citizen or permanent resident with a Social Security number (SSN), and have a bank account and email address.
• Have fair credit, with some exceptions: Most lenders require good credit, but some are welcoming to fair-credit borrowers. Some lenders, like Upstart, even offer personal loans to students with no credit history. It’s possible to get a loan with no credit check, but those options often have sky-high interest rates, and are best avoided.
• Have sufficient income to cover your debts: Most lenders check your debt-to-income ratio, which is the share of your monthly income that you put toward making your minimum payments, and some lenders also have minimum income requirements. However, you don’t necessarily need to be employed to get a loan — you can qualify with the alternative sources of income listed below.

Depending on the loan type, there may be additional requirements. For example, a home equity loan requires sufficient equity in your home.

Check out: Best loans for no credit history

Other loan income sources

• Self-employment income: If you work as an independent contractor, you can usually use the income to qualify for a loan, but you may have to show a track record of consistent earnings, such as your previous year’s tax return.
• Offer of employment: Some lenders will issue a loan if you have an offer of employment that will begin soon, even if you’re not earning income now.
• Social Security: If you receive benefits from a Social Security Administration program, including Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), you can include your monthly benefit as income on most loan applications. If you receive SSI, be aware that any loan funds you don’t spend will count toward your resource limit in the following month.
• Unemployment benefits: Some lenders accept unemployment insurance benefits as a source of income, but they may require proof that you’ll receive the benefits for a certain length of time.
• Alimony or child support: To use alimony or child support as a source of income, you’ll generally need to provide a copy of the court order or agreement.
• Spouse’s income: You can’t typically include your spouse’s income on a personal loan application unless they’re applying with you as a co-borrower or cosigner.
• Pension or retirement income: With the right documentation, you can list your retirement income on a personal loan application with most lenders.
• Recurring interest: If you earn consistent income as a shareholder or investor, you can often use that income to qualify for a loan. Unrealized gains, inconsistent income, and dividends don’t typically count, however.
• Rental income: If you rent an investment property to tenants, you can often list the rent payments as income, but you may have to prove a steady history of rental income.
• Royalties: Some lenders may accept royalties from intellectual property as income, but you’ll likely need to show a consistent history of earnings.
• Income from a trust: If you get regular income from a trust fund and can document future payments, that may count as income.
• Foster care and adoption subsidies: Some lenders may accept foster care or adoption subsidies as income, though this is less commonly accepted than other sources.
• Regular gift money: If your family gives you money every month and you can document the recurring deposits, you can typically list the gift money as income.

Loans for unemployed FAQ

Can I apply for a loan if I'm unemployed?

Yes. While you’ll need to show proof of income to qualify for a loan, the money doesn’t need to come from a salary or wages. Self-employment income, government benefits, retirement income, alimony, and other sources of income may count as well. You can also get a boost from someone else’s income if they apply with you as a cosigner or co-borrower.

Where can you get a personal loan while unemployed?

Most lenders offer loans for unemployed people who have an alternative source of income, including the lenders listed on this page. The best option for you will depend on your personal finances. Prequalify with multilevel lenders to get a sense of the rates you might get.

Should I get a personal loan while unemployed?

It depends on your financial situation. You should never take out a loan if you won’t be able to afford the monthly payments. If you’re still receiving regular income from another source or you already have a future job offer, you’re more likely to be approved for a personal loan while unemployed.

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