Personal loan

How to get a personal loan without a job

  • Some lenders will let you get a loan without a job, but you’ll probably need some form of income.
  • Understand the interest rate, term and fees of your personal loan before agreeing to the terms.
  • Instead of taking out a loan, you could ask family and friends for help or dip into your savings.

If you’ve lost your job, a personal loan is an option that could help you pay your bills. It is possible to get a loan when you are unemployed, but more difficult than if you had a stable job. Your chances of approval depend on the lender and your overall financial situation.

Lenders look at many factors when reviewing your application, including

credit score

, your payment history, your debt ratio and your annual income. Although it may seem disconcerting if you are unemployed, many lenders are willing to consider other sources of income. This can include alimony, disability benefits, pensions, etc.

You may also be able to find another source of income from a side gig, get a co-signer, or provide collateral to increase your chances of being approved.

Know exactly what you’re getting into with a personal loan

Before signing for a loan, read all the conditions carefully. Understand the interest rate the lender charges you, the payment schedule and associated fees. Thoroughly reviewing the details beforehand will help you avoid problems later.

When deciding whether or not to take out a loan, Andrew Latham, a Certified Financial Planner® and the editor of SuperMoney, says you must first consider the purpose of the loan and whether you will have the income to repay it. It is less important whether or not you have a job.

“Getting a jobless loan can be a smart move whether you’re investing in your education or starting a business,” Latham says. “It’s also possible to be financially responsible and get a personal loan without a job as long as you have another source of income, such as interest and dividends, social security, long-term disability, a alimony or pension.”

What are the risks of taking out an unemployed loan?

You must have a solid plan to repay your loan. Falling behind on your payments can cause you significant financial harm. Without a consistent source of income, this might require a bit more creativity. For example, you can choose to take a side gig or sell extra items you have at home.

Falling behind on your payments can cause you to lose your collateral (in the case of a secured loan) or end up paying thousands of dollars in extra interest. Plus, you can seriously damage your credit score with missed or late payments.

You may have to pay higher interest rates or origination fees because lenders view you as a riskier unemployed borrower.

“If you don’t have a job, taking out a loan is something you should avoid as much as possible due to the possibility of missed or late payments and a high interest rate,” says Forrest McCall, personal finance expert and founder of “If you take out a loan, make sure you understand the terms of the loan, so you can repay it without racking up significant interest charges.”

What are the other options besides getting a jobless loan?

If you don’t qualify for a loan, consider the following alternatives:

  • Decrease spending. Look at your budget and see where you can cut costs. This may include switching to a cheaper mobile phone plan or reducing dining out.
  • Take extra work. There are many options available for finding work in the gig economy, including food delivery apps like Postmates and Grubhub or ride-sharing options like Uber or Lyft. You can also search the web for odd jobs that can supplement your income enough to cover your necessary expenses.
  • Look for other forms of help. This may include friends and family, local nonprofits, or federal programs. You will never know what you are entitled to unless you actively seek out help and ask for it.
  • Consider using your savings or emergency fund. If you have cash stashed away for a rainy day or an urgent financial situation, the time to use it is when you lose your job. This might not be practical for some potential borrowers, but it’s a helpful reminder that while many experts say never touch your savings, there are scenarios that require it.