Unemployment Loans: How to Get One When You Need It Most
January 28, 2020
Regardless of how prepared you might be, life has a way of catching us off guard. For some, this may look like an accident with a car, a flooded basement, or a change in health and wellness. No matter what that thing is, you want to make sure you have options to take care of yourself. While an emergency fund can help cover day-to-day expenses during months of unemployment, what might you do if you need a little more money to hold you over if something out of the ordinary happens during that time?
Today, we’re expanding your options for helping yourself when trouble arrives. It’s always prudent to work on your emergency and rainy day fund but sometimes, life throws expensive curveballs your way. You want to make sure your finances can weather storms that come your way.
Let’s talk about personal loans for unemployed borrowers
Depending on the status of your credit score, you may be eligible for a range of personal loans that can help you in moments of difficulty. NerdWallet identifies online lenders, credit unions, and banks as the main sources for borrowers to seek loans.
When seeking a loan, lenders take several factors into consideration—one of which is your income. Unless your credit score is very low and you have a history of bad credit, a personal loan shouldn’t be impossible. However, not having an income can make you a less favorable candidate. Given the role income plays in your being granted a loan, here are some considerations to expand what income could look like if you’re unemployed per CreditKarma’s suggestions:
- Marital spouse income — Depending on your loan provider, your marital status might play a role in helping you get a loan because your income is considered jointly rather than singularly. The thought process is, should your lack of income make it difficult to repay your loan, your spouse should be able to. This would make your spouse a makeshift co-signer of sorts to your loan.
- Investments & retirement — Your investments (stocks, bonds, housing, etc.) and retirement funds act as a safety net. These funds tell the bank that regardless of your lack of steady-stream income, you have money saved that can act as collateral in the event that you can no longer uphold your loan agreement.
- Outside payments — Outside payments include severance pay, child support payments you’re receiving, etc. These types of payments are considered because they happen with regularity over a defined period of time much like income.
- Side hustles — Having multiple streams of income can help you in moments of unemployment so you don’t totally have to rely on your primary job. This can also show the bank that your income stretches beyond your first job as you’re employed by many.
Generally speaking, loan providers are most excited about candidates who will return their money within the agreed-upon window of payback. Having an income tells loan providers you have a predictable stream of income from which you can pull funds to pay them back.
Online loans for unemployed borrowers
While borrowing from a bank, credit union, or loved one presents great options when you’re in financially tough situations, some times you need cash fast. If this is the case for you, you may want to consider an online loan.
Online loans offer you a way to easily apply for the money you need and compare offers easily, too. If you decide to embark on this process, you’ll want to make sure you choose a loan provider who fits your needs best in terms of interest rates, loan amount, and the stability of your provider.
Knowing how to be prepared for moments of financial difficulty is your first defense for staying afloat. However you decide to pursue your personal loan, be sure you are able to speak for yourself and show providers why you are a good candidate to borrow money. Getting loans for unemployed borrowers can be difficult to obtain but knowing how to best position yourself can help make this process easier and save you in times of trouble.
Interested in more information about debt, loans, and consolidation?
We’ve got you covered! Take a look at our Pros & Cons of Personal Loans for Debt Consolidation.
If you’re looking for a better way to borrow and would like to get a better idea of what a personal loan might look like for you, pop over to our Payment Calculator to estimate your loan payments with Illinois Lending!