How To Get A Loan Without A Job

Getting a loan can be stressful, even if your finances are in impeccable shape. But if you don't have a job, it can be even more stressful or even impossible. If you've ever wondered how to get a loan without a job, the good news is that it may be possible. Whether you can get a loan without a job depends on the type of loan you're applying for, your credit score, any alternative sources of income you have and your overall financial picture.

Can You Get A Loan Without A Job?

Getting a loan without a job is possible in some circumstances, though it may be difficult. If you are recently unemployed without any current income sources, it may be difficult to get many types of loans. Lenders may look at your financial picture and wonder if you will be able to make the loan payments. If you do qualify for a loan without a job, you may find that the terms of the loans are unfavorable, such as ones with a high interest rate.

Here are some of the major factors that lenders may consider when reviewing a loan application from someone without a job:

• Credit score: Your credit score will have one of the biggest impacts on your ability to get a loan without a job. If you have an outstanding credit score, you might not have any trouble qualifying for a small loan even without steady income.
• Payment history: Along with your credit score, your past payment history can also affect your odds of loan approval if they don’t have a job.
• Alternative income: Even if you don't have a job, you may be able to get a loan if you have other sources of income besides employment. These alternative income sources can include alimony, child support, disability benefits, retirement benefits, Social Security benefits and unemployment benefits. You may also have income coming in from a business or side hustle.
• Debt-to-income ratio: Your debt-to-income ratio (DTI) can also have a big impact on whether a lender will approve your loan application. If you have a large amount of debt, it may make it less likely that you will be able to get a loan.

4 Ways To Get A Personal Loan With No Job

If you're looking to get a personal loan without a job, here are a few things you'll want to keep in mind:

1. See If You Qualify For An Unsecured Loan

There are a few scenarios where someone without a job may qualify for an unsecured loan. When you apply for an unsecured loan, the lender will look at your overall financial picture to decide whether or not to approve you. If you have adequate alternative sources of income and/or a high credit score, you may be approved even without a job.

2. Get A Secured Personal Loan

Another option might be getting a secured personal loan. Before applying for an unsecured personal loan, you'll want to make sure you understand how a secured loan works. A secured loan is more likely to be approved than an unsecured loan, since the lender has some sort of collateral to make sure that you pay off the loan. Examples of assets you could secure a loan with might include a car, house, or another piece of personal property with value.

3. Use A Co-Signer

If you're trying to get a loan without a job, another option might be working with a co-signer on an unsecured personal loan application. Having a co-signer with a job and good credit may help you get loan approval without a job. Keep in mind that having a co-signer can impact both the borrower and co-signer’s credit, so you should only choose someone you trust, such as a family member or close friend.

4. Apply For A Joint Loan

Similar to working with a co-signer, another option might be a joint loan, where you apply for a loan with another borrower. The financial information of both the borrower and the co-borrower is used by the lender when deciding whether or not to approve the loan. This means that applying for a joint loan might make getting a loan easier for someone without a job. Again, a joint loan can affect the credit of both co-borrowers, so you should only consider a joint loan with someone trustworthy, such as a family member or close friend.

Alternatives To Getting A Personal Loan Without A Job

If you can't get a personal loan without a job, then there are a few alternative funding methods to consider if you're looking to get cash.

Tap Into Your Home Equity

Homeowners without a job might consider using a home equity loan or home equity line of credit (HELOC) to access funding. While a home equity loan and HELOC both use your home's equity, they work in different ways. Note that these options would only be available if your home has sufficient equity to borrow against.

Look For A 0% APR Credit Card

Certain credit card companies may offer credit cards that come with an introductory 0% APR period for new cardholders. If you are currently without a job, this may help you access funding without high interest fees. One important thing to keep in mind when applying for and using a 0% APR credit card is that you will want to make sure to pay off the card balance before the introductory period ends. If you don't, you may be subject to significant amounts of interest and / or fees.

Consider A Cash Advance

Another option, depending on how much money you're looking for, might be a cash advance on one of your credit cards. Keep in mind though that there are downsides to using your credit cards for a cash advance. This might include a cash advance fee charged by your credit card issuer and the fact that most credit card issuers start charging interest on cash advances the day of the advance, even if you pay off your cash advance when the statement comes.

FAQs: Loans Without A Job

Can I get a personal loan without a job?

Yes, it is possible to get a personal loan without a job, but it may be difficult, depending on your overall financial situation. If you don't have a job, you may be able to get a personal loan if you have good credit and/or other sources of income. Still, you may end up having a harder time being approved or be charged higher interest rates than someone with a job.

Can I get a loan with no income?

If you have no income at all, you may be able to get a loan, but it might be difficult. Lenders typically want to see an ability to pay back a loan before offering one. You may want to explore other options, such as working with a co-signer or getting a secured loan. Typically, you will want to avoid predatory or misleading “no-income” or “no credit check” loan offers (for example, pawn shop loans), since they come with potentially risky terms and conditions.

Can I get a loan as an independent contractor or freelancer?

Yes, it is possible to get a loan if you are an independent contractor or if your only sources of income come from a small business or side hustle. However, it may be more challenging to be approved since some lenders may be hesitant to loan money to someone without guaranteed income. You are likely to have to show a significant history of income (such as 2 years of past tax returns) as part of your loan application.

Should I take out a loan without a job?

Taking out a loan is a serious financial decision and commitment, and it's one that you should not undertake lightly. Your credit is one of your most important assets, so you should consider how you will pay back your loan before you apply for it. If you're not able to pay back your loan, you may face the forfeiture of any collateral you put up for the loan as well as a significant hit to your credit score.

The Bottom Line

Lenders usually look at an applicant's complete financial picture when deciding whether to approve a loan application. If you are without a job, you'll want to assess your financial situation and your ability to take on another monthly payment before applying for a loan.

If you are thinking of getting a loan with no job, consider downloading the Rocket Money℠ app for a snapshot of your full financial picture – including assets and spending habits – in one place.