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Key takeaways
- Even without a job, you can generally get an emergency loan if you can prove a reliable source of income such as disability benefits or a spouse’s income.
- Lenders that offer loans without proof of income are probably predatory.
- If you try to apply for loans with a low credit score or high debt-to-income ratio, you could face high fees and be more likely to default.
- If you do not have a steady income, look into loan alternatives like assistance programs, repayment plans or help from family and friends.
You do not need a job to apply for an emergency loan. However, you will need to have enough income each month to cover the cost of any loan, including every type of emergency loan. Fortunately, it doesn’t have to be from a job or other form of employment.
Lenders are more concerned with income than employment. Provided you have a regular source of income, a lender will likely not care where that income is from. As such, lenders may be willing to consider benefits or other sources of income when you need an emergency loan.
How to get an emergency loan without a job
Since lenders care more about reliable income than having a job, you can submit a wide range of income types as part of your loan application. That’s not all you will have to do to prepare, however.
- Learn your credit score: It is important to check your credit score so you know which lenders are most likely to approve you.
- Review your credit report. According to Consumer Reports, nearly half (44 percent) of those who review their credit reports find mistakes — and errors on your credit report can drag down your score. Be sure to check your credit report to ensure that you are not being unfairly penalized.
- Gather necessary paperwork: You will need to submit certain information for your emergency loan, including proof of identity, proof of address and pay stubs or other income information.
- Determine collateral: If you have a low credit score, you may have to provide collateral for your loan, such as your home or car. However, if you fail to pay your loan, you could lose your car or home to settle the debt.
- Consider a cosigner: If you do not have any collateral to put up, consider getting a cosigner for your loan. A friend or family member with good credit could help you qualify for a better rate and terms.
Acceptable income sources
Income sources that your lender may accept include:
Lenders may also accept income from freelance or contract work. If you are unemployed when you apply but have a pending job offer, your lender may be willing to accept this as a valid source of income if you’re set to start the job within the required timeline.
Loans without income verification
Some disreputable lenders offer loans without proof of income, but you should avoid them. There is a high chance that the loan could be an example of predatory lending. You will likely be charged a sky-high interest rate plus fees, and you may have only a short time to repay these loans. If you can’t keep up with payments and default, that means even more fees, credit score damage and potential legal action.
It may not be the ideal solution, but you should avoid debt when you don’t have reliable income. Any type of debt — including emergency loans and credit cards — will only increase your likelihood of getting stuck in a debt cycle. Instead, look into the alternatives we discuss below.
Emergency loan eligibility requirements
In addition to your income, lenders will consider your credit score and debt-to-income ratio (DTI).
Credit score
Some lenders offer emergency loans to borrowers with bad credit, but they may charge annual percentage rates that come out to well over 600 percent. Also known as payday loans, this type of predatory financing can leave you facing a debt cycle that can put even more strain on your budget next time you face an emergency.
If you have bad credit and an urgent financial need, explore payday loan alternatives instead.
For borrowers with good to excellent credit, you will likely be able to qualify for other types of personal loans to cover emergency expenses. Interest rates will be lower, and since personal loans are flexible, most can be used for any unexpected costs that come up.
Debt-to-income ratio
If you have existing credit card or personal loan debt, you may struggle to qualify for a loan. A debt-to-income ratio above 50 percent will likely prevent lenders from approving you for an emergency loan. Regardless of your credit and finances, if the lender believes you don’t have sufficient income to cover new debt due to a higher DTI, you’re unlikely to qualify.
Emergency loan alternatives
Emergency loans are frequently a high-cost option no matter your credit score, and when you don’t have a job, they can put significant strain on your budget. Consider some common alternatives first.
- Negotiating a payment plan or extension with your lender will help you lower your debts and make it easier to cover short-term emergency expenses.
- Applying for a credit card may be difficult without a job, but you may still be able to qualify with a regular source of income. And they can help you avoid borrowing a large amount if you only need a few hundred dollars.
- Try applying for assistance or hardship programs offered by local nonprofits or governmental agencies if you need help affording your basic needs. The nonprofit United Way operates a phone number, 211, that connects people to local programs offering assistance with food, rent, utilities and more. Call if you’re unsure where to start.
Bottom line
If you decide an emergency loan is the right decision, take the time to compare emergency loan rates before you apply. As long as you have a reliable source of income, you should be able to find emergency loans with no job. However, it’s wise to consider the alternatives to avoid paying interest, especially if finances are already tight.
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