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Man in yellow hoodie using a laptop wondering if he can get a loan as he is unemployed.

The Best Personal Loans for the Unemployed

A personal loan can help you finance a big purchase or pay off your credit card debt. Getting a personal loan may seem difficult if you are unemployed, but this is not always the case.

If you are unemployed or do not have traditional proof of income, you may still obtain a personal loan for a large expense or to help you pay off your debt. Your credit history, credit score, and debt-to-income ratio will be determining factors in approving your loan application. 

What are the best personal loans if you are unemployed? Below, we will look at the best personal loans available when you are unemployed.

Personal Loans Defined

A personal loan is a loan provided by a bank or other financial institution that is repaid through a set number of payments made over a set period of time. You can obtain a personal loan for any reason. For example, they can be used for bill consolidation, large purchases, or emergency expenses. Most personal loans do not require any collateral to receive them.

With a personal loan, you can access a set amount of money with a set payment schedule. With a set schedule, you won't have to worry about the revolving payments that come with credit cards.

Getting a Personal Loan If You Are Unemployed

You can get a personal loan when you are unemployed or do not have traditional proof of employment. However, it can limit your options and the amount of money you can obtain.

You can use alternative income as proof you can repay the loan. For example, unemployment benefits, retirement benefits, your spouse's income, and freelance income can all be used as proof you can repay a personal loan. Other income sources include interest from stocks, bonds, or other investments and any monthly alimony or child support you receive.

How To Get a Loan Without Proof of Income

Some banks and financial institutions will consider individuals without a traditional income for a personal loan. However, the amount you can get and the loan terms depend on your credit score. You cannot get the loan if your credit history is not optimal. Researching and finding the best loan options that fit your situation will help you get the financing you need. 

Other Factors for Getting a Personal Loan  

Aside from proof of employment, other factors are considered when applying for a personal loan. For example, lenders will also review your ability to repay the loan, your credit score, and your credit history.

Credit Score

Your credit score will be the most significant determining factor when you apply for a loan. It will give the lender a look at the current state of your credit. The higher your credit score, the better your chances of securing a loan. However, getting a loan with bad credit or no credit is still possible.

If you are unemployed and have been turned down for credit in the past, you may still be able to get a personal loan.

Credit History

A good portion of your credit score consists of your credit history. Therefore, it will be a large factor when qualifying for a personal loan. In addition, your payment history on other credit cards and other loans will be considered when you attempt to qualify for new lines of credit.

Having a history of late or missed payments will not disqualify you from obtaining a personal loan. However, if you have had past credit issues, you will need to contact a loan officer to find a personal loan that will fit your needs.

Debt-to-Income Ratio

Your debt-to-income ratio may also be a factor when you are applying for a personal loan. It calculates your monthly debt payments divided by your gross income. Your gross income is the amount you make before any taxes or deductions are taken out. It is used to determine your ability to repay the loan.

A high debt-to-income ratio may show you lack the income to repay the debts you have or wish to take on. It would be an indication that you have taken on too much debt. A loan officer may decline your loan if you have a high debt-to-income ratio.

Alternatives to Personal Loans

If you need fast cash for an emergency, there may be other options to consider to get you the money you need. For example, you might be able to get a personal loan or a credit card.

Personal loans are similar to personal loans, with set amounts to borrow, but come with flexible loan repayment terms. You are not required to spend the entire personal loan amount. They are more flexible than traditional loans.

Opening a new credit card may help relieve your financial burden when you are unemployed. It can provide you with the immediate funding you need, with the option to pay it back over time. However, you should consider all your options to make the best financial decision before taking out any loan or credit card.

Simple Fast Loans

Simple Fast Loans should be your first option when looking for a personal loan if you are unemployed or do not have proof of income. We work with all types of people, credit ratings, and situations. They offer personal loans giving you a great option when you need financial help.

Personal loan amounts range from $200 to as much as $3,000. The loan process is conducted online, and their decisions are immediate. They offer same-day funding for loans completed before 2 p.m. and funding for loans completed after 2 p.m. the following business day.

To apply with Simple Fast Loans, you will need your name, address, active checking account, and proof of ID. Simple Fast Loans offers loans to anyone over 18. Income statements and Social Security numbers may also be required, depending on the loan you are applying for.

All the terms and conditions are disclosed upfront when applying for a loan with us. There are never any hidden fees. All of the repayment schedules are disclosed before the loan is finalized.

Obtaining a personal loan when you are unemployed or do not have proof of income is more complex, but it is still possible. There are many options to obtain a personal loan for emergencies and large purchases, even if your credit is poor.

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