Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Ashley Fricker
A strong economy is a scant consolation if you find yourself struggling with unemployment. Millions of Americans are out of a job and contending with having enough money to live on. Some turn to loans to get them over the rough patches, but what do you do if you are unemployed and have bad credit?
Believe it or not, you do have options, and we’ll explore loans for unemployed people with bad credit.
Before you apply for a loan, consider whether you’ve exhausted your other options. These include collecting unemployment insurance, welfare benefits, and help from family and friends. If you decide you need a loan, you’ll have a menu of choices, such as personal loans, cash advances, and lines of credit.
We’ll show you the best online personal loans available right now if you’re unemployed and your credit is bad, plus we’ll discuss alternative types of loans.
Online Lenders | Alternatives | FAQs
Online Loans For Unemployed People With Bad Credit
Having a bad credit history shouldn’t cut you off from receiving loan approval, even if you are out of work right now. However, you will have to show some form of income, such as welfare, disability, or unemployment benefits, backed by bank statements, investment account statements, or other documents showing sources of income.
Most online lenders also require you to be a U.S. resident at least 18 years old and have an active checking account.
1. MoneyMutual
- Short-term loans up to $5,000
- Online marketplace of lenders
- Funds available in as few as 24 hours
- Simple online form takes less than 5 minutes
- Trusted by more than 2 million customers
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| Up to $5,000 | Varies | Varies | See representative example |
MoneyMutual arranges short-term loans of up to $5,000 for folks with bad or scant credit. It matches your online loan application to its network of lenders who then compete for your business.
You do not have to be employed to apply for a cash loan, but you must have a monthly income of at least $800. MoneyMutual is not available in Connecticut and New York. The matching service is free.
- Small personal loans starting at $100
- Receive an approval decision in as little as 2 minutes
- Funds can be deposited into your account in one business day and used for any purpose
- No hidden fees
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $100 to $20,000 | Varies | Varies | See representative example |
SmartAdvances.com may be able to connect you with a lender even if you don’t have a job. Its website says, “Some lenders may still accept your loan request if you receive regular benefits income (at least $1000 monthly).”
So, as long as you have at least $1,000 per month being deposited into your bank account that the lender can verify, approval is feasible. Please note that Meta Bank accounts are not eligible for a loan.
- Loans from $500 to $10,000
- Get connected with a lender
- Simple form & quick funding
- Get your money as soon as next the business day, if approved
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $500 to $10,000 | 5.99% - 35.99% | 3 to 60 Months | See representative example |
BadCreditLoans.com is a matching service for bad credit loan requests of up to $10,000. Even if you are unemployed, lenders will work with you if you have regular income from disability or Social Security benefits.
The minimum loan amount is $500 and repayment terms range from three to 60 months. Bad Credit Loans has been facilitating loans since 1998 and doesn’t charge for its matching service.
- Quick loans up to $5,000 as soon as tomorrow
- Submit one form, get multiple options
- All credit ratings welcome — good or bad
- Requires a checking account and $800 minimum monthly income to apply
- No collateral or cosigner required
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $250 to $5,000 | Varies | Varies | See representative example |
InstallmentLoans.com says many of its lending partners specialize in providing loans to people who receive various types of benefits, including Social Security, retirement, or veteran’s benefits.
There is no cost to complete the request form for a bad credit loan of up to $5,000, and you are under no obligation to accept any loan offer.
- Loans from $250 to $35,000
- Large lender network
- Fast loan decision
- Use the loan for any purpose
- Funding as soon as one business day, if approved
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $250 to $35,000 | 5.99% - 35.99% | 3 to 72 Months | See representative example |
The lending partners of PersonalLoans.com offer online personal loans from $500 to $35,000 to folks with credit scores as low as 580. You don’t need a job to apply as long as you have an acceptable income source such as disability, Social Security, or unemployment benefits.
The minimum monthly gross income requirement is $2,000, which is a bit more than the other networks listed above. The lenders on the PersonalLoans.com network may do a hard pull of your credit report. The matching service is free to use.
Personal Loan Alternatives For the Unemployed
A personal loan is attractive because it doesn’t require collateral. If the lender approves your loan, all you need to do to get your money is sign the loan agreement.
However, some folks won’t qualify for personal loans, whether due to bad credit, unemployment, or some other reason. Luckily, consumers have alternatives beyond personal loans that can help address a temporary cash crunch:
- Credit Card Cash Advance: If you own a credit card, you likely have the ability to get a cash advance up to a set limit. Beware that interest accrues from day one, as well as cash advance fees that can mount up fast. Some cards specialize in offering low fees for cash advances.
- Peer-to-Peer Loan: These are similar to unsecured personal loans, except that the loan provider can be any individual or institution that accepts your application on an online marketplace.
- Loan from Family or Friend: If available, these might be the easiest to obtain, but keep in mind possible drawbacks. Even if you don’t have to pay interest, you risk alienating someone close to you if you fail to repay the loan. Also, some folks just don’t want to share their financial circumstances with their close ones.
- Car Title Loan: You can use your car to secure a title loan as long as you have sufficient equity in the vehicle. These loans are costly and you risk losing your car if you default on the loan.
- Home Equity Line of Credit (HELOC): This is a revolving loan account backed by the equity in your home. It usually charges a reasonable APR, but, of course, is only available to homeowners.
- Refinancing Loan: If you have equity in your home or car, you may be able to arrange refinancing that allows you to cash out some of your equity.
- Pawn Shop Loan: Pawn shops charge high fees and interest rates to advance you from 25% to 60% of the pawned object’s resale value. Best avoided if possible.
- Payday Loan: Though approval for these loans is typically based on your paycheck from an employer, some payday loan providers will accept income from benefits, including unemployment. Due to the high interest rates associated with these loans, we only recommend that as a last-resort emergency loan option.
All of the alternatives listed above require serious consideration — evaluate each carefully if you do not qualify for a traditional personal loan to determine which may work for you.
How Can I Get a Personal Loan While Unemployed?
The five loan-matching services we review in this article all offer personal loans to unemployed individuals, even those with bad credit. The catch is you must show some form of regular monthly income. Typical income sources include Social Security, disability benefits, pensions, annuities, and unemployment insurance.
The procedure for getting these loans is straightforward. First, you visit one of the loan facilitator websites and fill out a request form for an unemployed loan.
Our top-rated site is MoneyMutual, but all five follow the same basic procedure. If you meet the minimum requirements, the website will alert its network of lenders to your request.
- Short-term loans up to $5,000
- Online marketplace of lenders
- Funds available in as few as 24 hours
- Simple online form takes less than 5 minutes
- Trusted by more than 2 million customers
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| Up to $5,000 | Varies | Varies | See representative example |
Each interested direct lender will then contact you and invite you to fill out its loan application. These applications ask about your monthly income, including its source. If your income meets or exceeds the lender’s minimum requirement, you may qualify for a loan.
Because these websites serve consumers with poor credit, you should expect to pay a high interest rate to secure the loan. High fees may also apply, however, these are some of the few sources providing unsecured loans to people who are both out of work and have bad credit.
As long as your monthly income is steady and high enough, you stand a decent chance of getting a personal loan. If you need a large loan, consider PersonalLoans.com, which offers loans of up to $35,000 to consumers who have a credit score of 580 or higher.
BadCreditLoans.com also advertises large personal loans up to $10,000. However, if you have really poor credit, you should expect a loan of no more than $1,000, even with sufficient income.
How Can I Get a Loan Without Proof of Income?
The loan matching services we review here all indicate you must provide some proof of income to get a loan. This could be a pay stub, benefit checks, or proof of regular annuity or pension income. If you can’t provide any proof of income, you’ll have to look for an alternative lending source.
Typically, secured loans do not require you to provide proof of income. That’s because you have to put up collateral to obtain a secured loan.
The lender knows it can seize the collateral and sell it if you default on your loan. That makes secured loans much less risky, which may entitle you to a lower APR and fees. The downside is you will lose your property if you default on your loan.
The usual forms of collateral that lenders routinely accept include your home, car, cash, and securities. For cars and homes, you can only borrow to the extent that you have equity in the property.
Equity is the value of the property that exceeds any existing loan balance on it. A HELOC is a popular way of unlocking equity in your home. A car title loan lets you cash out your equity in your vehicle, but typically has higher rates and fees than a HELOC.
If you have a savings or brokerage account, you may be able to pledge the account as collateral for a personal loan. You won’t be able to withdraw the collateral until you repay the loan. These too have favorable interest rates and lower fees.
Can I Get a Loan if I Just Started a New Job?
A job, new or not, is helpful for getting a loan. If you have a new job that ended a period of unemployment, you may have to document your salary. You can usually do this by sharing a copy of your employment acceptance letter with the lender. A few pay stubs should also suffice.
Proof of employment is especially important if you have a bad credit score. But you can look upon the loan as a golden opportunity to improve your score.
To help boost your credit score, you must use a lender that reports your payment activity to at least one of the three major credit bureaus: Experian, TransUnion, and Equifax, and preferably with all three. All five lending networks reviewed in this article indicate they report your activity to at least one credit bureau.
You want those reports to be positive, which means you always pay on time and always pay at least the minimum due. It could accrue to your benefit if you pay off your loan faster than required. The most important factor is to use the job to establish good credit by paying your bills on time.
No Job? Bad Credit? No Problem.
Well, perhaps we overstate just a bit. But the loan matching services reviewed here all facilitate loans to unemployed borrowers with bad credit. As long as you can show enough monthly income from a legitimate source, you stand a decent chance of obtaining a loan despite your bad credit rating.
And, of course, if you are approved for a loan, be sure to make payments on time to begin rebuilding your credit and not digging yourself into a deeper financial hole.
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