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How to Get a Personal Loan With No Job

(July 2024)

S'witty Kiwi Editors
July 3, 2024

Unemployment can affect your finances. At this point, applying for a personal loan may seem like a viable way to get by. It is possible to get a loan when you have no job. However, you will need good credit and steady income.

No matter your reason for being unemployed, whether it’s by choice (retirement) or by chance (being unemployed unexpectedly), your lender can still loan you the money you seek. You just need to convince your lending institution that you can make payments on time.

This article will show how to apply for a loan with no job. To get the loan you seek, pay attention to these points:

Understand your loan options
Document your assets
Have a good credit history
Have a good credit score
Have a good debt-to-income ratio
Have regular income, if possible

Let’s begin!

1. Understand Your Loan Options

If you want to apply for a loan with no job, you first need to understand your loan options. There are several loan types in the market—secured loan, unsecured loan, no income loan, no asset loan, and the likes. Therefore, understand what loan type suits your situation before you apply for a loan with no job.

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2. Document Your Assets

While applying for a personal loan with no job, you may want to go for a secured loan. This does not mean that you cannot apply for an unsecured loan. Nonetheless, whichever loan you choose to apply for, you need to prove to your lender that you can repay the loan.

To do this, you can co-sign the loan, provide proof of steady cash flow, and also prove you have assets. This way, you reassure your lender that you can repay the loan.

3. Have a Good Credit History

A record of prompt payment in recent years on your credit file reassures your creditor of your creditworthiness. If you are applying for a personal loan—especially an unsecured loan—with no job, your lender will check your credit report and scores independently through a hard pull to ensure your creditworthiness.

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4. Have a Good Credit Score

If you want to apply for a loan with no job, your credit score must be in good shape. There is a baseline credit score requirement for several loan types. Your lender will only save the top loan programs with the best APRs for applicants with the best FICO scores.

But if you want to apply for a loan with no job, and your credit score doesn’t look good, you will have to improve your credit score. To do this, you’ll need to pay down any revolving credit to a large extent, to reduce your credit utilization percentage.

5. Have a Good Debt-to-income Ratio

Your debt-to-income ratio is another factor your lender will consider before approving your loan. The debt-to-income ratio is your monthly debt payment divided by your monthly income. The result obtained from your debt-to-income ratio informs your lender how well you can manage your monthly income to repay your debt.

If your debt-to-income ratio is 10%, it means that 10% of your monthly income goes to debt payment. If you have a high debt-to-income ratio, it means that a high percentage of your monthly income goes to your debt payment. This only shows your lender that you may not be able to repay your debt.

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6. Have Regular Income, if Possible

You don’t need a job to have regular income. You could own a business and still generate income If you’re looking to get a loan with no job, demonstrating steady income could boost your approval odds. Staying at home with no source of income only makes your chances of applying for a personal loan a bit more challenging. However, if you have other sources of income, you may still be eligible to apply for a loan. Here are other sources of income you could use to apply for a loan if you have no job:

Your investments. If you have investments in real estate, crypto or stocks, it can serve as a plus for you while applying for a loan. However, a one-time gain from your investments may not be enough proof to your lender that you can repay the loan you seek.
If you are married, you can add your spouse’s salary on your application, only if your lender permits. However, this can only be possible if your spouse allows you to use the money he or she earns to repay your loan.
If you will use your spouse’s salary as a source of income, then you’ll need to add him or her as a co-applicant. If you are out of job by choice (that is, retirement), then use your retirement benefits—including 401k withdrawals or social security benefits—to apply for a loan

If you do but fall within any of the aforementioned categories, you could use other sources of income to apply for the loan you seek. Other sources of income your lender may consider include:

Public assistance
Alimony or child support Recurring interest or dividend payments
Government annuity payments

Note that: The Equal Credit Opportunity Act restricts your lender from asking you to divulge certain kinds of income such as child support or public assistance. One more thing: Bear in mind that applying for a loan with no job can be risky. Before you apply for a personal loan from your online lender, credit union, or bank, be sure you have weighed all your options. Some of the risks inherent in a loan with no job are:

Higher interest rates: You may get a loan with higher interest rates
Inability to repay the loan: If you are applying for a loan with no job, chances are you may not be able to repay the loan. This is a noticeable worst-case scenario. And unfortunately, if you fail to pay back a loan, you only damage your credit score further and make your financial situation tougher
Short repayment term: If your lender feels you are a risky borrower, then you may be restricted to loans with a short repayment term. This is because your lender is less likely to believe that your situation can change in such a short time

Conclusion

Again, applying for a personal loan with no job can be challenging, but very feasible. However, with the points mentioned above—understand your loan options, present a good credit score, have a good credit history, debt-to-income ratio, and more importantly, a regular income, then you can definitely get the loan you seek even with no job.