How Can I Get a Loan With No Job? (2024 Guide)

Lenders will use your credit score, credit history and income to determine eligibility for a personal loan. 

• Your credit score shows how well you’ve managed debt in the past. 
• Your credit history shows whether you’ve paid your previous debts on time and how long you’ve managed credit. 
• Income can come from employment or other places, like child support or alimony. If you have money coming into your accounts on a regular basis, you may be able to use it to prove your ability to pay back a loan.

Personal loans are typically unsecured, meaning they’re not backed by collateral. However, if your income and credit score are less than ideal, offering collateral could help you secure a loan. Each lender has different requirements, but a car, house, boat or investment account could be considered as eligible collateral.

To better your chances of securing a loan without traditional employment, you will need strong knowledge of your finances. You’ll also need to pick the right lender for your financial needs, provide alternative income sources, prepare collateral (if necessary), then apply and submit the necessary documentation to get started.

Assess Your Financial Situation

Before applying for a loan, assess your current financial situation. Look at your income from various sources and make a list of your monthly expenses. Because longer loan terms can help reduce your monthly payments, it’s critical to determine the loan amount you need and what kind of loan repayment you can afford. 

Explore Lender Requirements

Before you start applying for a loan, look for lenders willing to work with those who are unemployed. Applying for multiple loans may negatively impact your credit score, so wait to start your application until you’ve found a lender who understands your situation. Reach out to multiple banks, credit unions and online lenders to find the most favorable terms and interest rates. Get a clear explanation of the fees, interest rates and repayment terms before you decide to apply. 

Provide Alternative Income Sources

Without traditional employment records such as a W-2 or pay stub, you’ll need to provide other documentation showing proof of income. Lenders will take into account your creditworthiness, but they also want to make sure you have a way to repay the loan.

Consider listing alternative income sources such as:

• Rental income: Provide lease agreements or bank statements showing rental deposits.
• Investments and dividends: Include statements and records of your investment portfolio.
• Freelancing or gig work: Present contracts, invoices and bank statements showcasing your earnings.
• Alimony: Submit court documents and voided checks showing amounts received.
• Worker’s compensation payments: Show award letters, pay stubs, settlement agreements or other proof you might have.
• Social Security: Obtain a benefit verification letter, a formal document from the government proving you receive benefits.

Prepare Collateral (If Necessary)

If you don’t have a large additional income or a solid credit score, providing collateral for a secured personal loan may help you get the loan amount you need. Start by gathering all the necessary paperwork such as documents, evaluations or appraisal information about your collateral. Types of collateral may include boats, cars, investment accounts and antiques.

To determine the loan amount, lenders will assess the value of your collateral along with your creditworthiness and income. Remember, if you still owe money on the asset — such as a car or house — the lender will only use the existing equity to determine your loan amount.

So if you have a car valued at $20,000 but still owe $15,000, the lender would only consider the $5,000 of equity, not the total value. It may be easier to secure a personal loan by providing assets as insurance. 

Before considering using collateral to secure a personal loan, it’s crucial to understand that you could lose the asset if you don’t keep up with your payments.

Apply and Submit Documentation

Once you’ve chosen your preferred lender, it’s time to get working on your application. Fill out the application as accurately and completely as possible.. 

If you submit your application with incorrect or missing information, you may experience delays in your loan being processed. Most personal loans are approved within seven business days.

Even without a full-time job, it’s possible to still have income. You can use income from rental properties, investments, dividends or freelance work to prove your ability to repay a loan.

Rental Income

When you own a property, be it a house, apartment or commercial space, you can generate income by renting out the space. Tenants sign a lease and pay you rent — which can generate a steady stream of income. Your tenants’ rent can often cover the mortgage and maintenance on your property, as well as provide extra funds that you could use as income.

To use rental income to qualify for a personal loan, you may need a copy of the lease, deposited rent checks and an established history of payments.

Investments and Dividends

Lenders consider investment income a reliable source of funds and they can be used as collateral for a personal loan, if needed. Having predictable payments, even at quarterly or annual intervals, qualifies as a source of income. 

 Here are the most common types of investment income:

1. Dividend stocks. Investing in dividend-paying stocks allows you to regularly earn a portion of the company’s profits. Companies typically distribute dividends to shareholders on a quarterly or annual basis.
2. Bonds. Bonds are loans you provide to governments or corporations in exchange for periodic interest payments. This interest serves as a consistent income source.
3. Mutual funds and ETFs. These investment vehicles can provide regular income through distributions of interest, dividends or capital gains.

Freelancing or Gig Work

Freelance work, gig work and side hustles are quite common these days. With the rise of platforms like Upwork and Fiverr, even people with full-time jobs supplement their regular employment with gig work. The increased popularity of this type of work may mean lenders are more familiar with the income ebbs and flows that come with freelance jobs. 

While your lender may be willing to use this source of income to approve your personal loan, you will still need proof of the funds you’re bringing in. You can use contracts, 1099 statements, bank statements and tax returns to show your overall income and ability to make monthly payments.

When you’re without a job, traditional personal loans may be more challenging to get. However, there are alternative avenues that you can pursue to secure the funding you need.

• Secured loans using collateral: If you have bad credit, a secured loan may be easier to obtain. Keep in mind that you could use your collateral if you default on the loan.
• Cosigner with excellent credit: If you’re struggling to meet the requirements to secure a personal loan on your own, you can ask someone to be your cosigner. Typically, people ask a family member or friend with an excellent credit history to cosign on the loan. A cosigner agrees with your lender to pay the monthly payment if you can’t.
• Government loans: In some cases, government programs may be available to provide loans or grants. Government loans are typically geared toward specific use loans such as small businesses, veterans, education, housing and agriculture. Grant programs may help those experiencing physical or economic hardship.

Although possible, getting a personal loan without a job may be more difficult. Shop around for a lender who considers all types of income, and take stock of all your sources of income before applying. 

Defaulting on a loan could have a negative impact on your credit and leave you in a worse financial situation, so make sure you have the means to pay back a loan before deciding to get one.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.