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Getting a Personal Loan When You’re Unemployed

Getting approved for a personal loan when you're unemployed is possible, but may require additional hurdles.

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Being unemployed can be stressful as you try to navigate the uncertainty of finances, especially when you have rent due or need to repay credit card debt. Tightening your budget and stretching your emergency fund is one way to weather this period. But what if you’ve run out of savings and used up all of your unemployment benefits?

Personal loans can be a way to stay afloat financially, but they should only be used with careful consideration of the pros and cons, as taking on additional debt without an income source can be risky. But if you’ve run out of options, personal loans can serve as a lifeline. We break down whether it’s possible to get a loan on unemployment, and the steps that can be done to increase your chances of approval. 

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Can I Get a Personal Loan While Unemployed? 

Yes, it is possible to get a personal loan while you’re unemployed, as employment status is not a primary consideration when qualifying for a loan. Lenders look at a variety of factors when determining whether to approve a loan, such as the following. 


A salary isn’t the only form of income a lender might consider. These are all considered valid forms of income.

  • Rental income
  • Income from an investment, such as dividends
  • Pension
  • Grants
  • Alimony
  • Settlement payments
  • Child support
  • Disability benefits
  • Side gigs

As long as the income is regular and obtained from a legal source, the lender may consider it even if you are not employed. 

However, if your previous job was the only source of income, then getting approved for a loan will be difficult without any income stream.


While income is one of the considerations when applying for a loan, you may be able to increase your chances of approval if you have collateral to offer. Just note that if you’re unable to repay the loan, the collateral will be collected, and you might lose your home or another asset you put up. 

If the lender doesn’t require collateral, you don’t have to offer it. An unsecured loan means that the lender takes all the risk. While you might end up with a slightly higher interest rate to cover that risk, it might be to a borrower’s benefit than potentially losing an asset. 

Repayment History 

If you have a very good credit history and can offer collateral, you may have a better chance of being approved for a personal loan.

Debt-to-Income Ratio

Debt to income ratio is how much of your income is spent on debt payments every month. This is what lenders look at when determining how much debt you can responsibly take on. If income is a determining factor in your application, this ratio will play an important part in deciding whether you will be approved. 

Ways a Personal Loan Can Be Helpful While Unemployed

When you’re unemployed, there are some expenses that you can cut from your budget to try and save costs. However, certain financial obligations aren’t that easy to cut from the budget, such as:

  • Rent
  • Utilities
  • Transportation
  • Food
  • Childcare
  • Insurance premiums 
  • Medical costs

A personal loan can act to bridge your finances until you’re on your feet again and can pay for these items out of your regular income. Lenders also offer emergency loans and same-day loans that can help cover urgent costs if needed.

Here are a few personal loans to consider.

Best for Bad Credit


  • Loan Amount: $1,000 – $50,000
  • APR Range: 7.96% – 35.97%
  • Loan Terms: 2 – 7 years
  • Credit Score: 560 or higher

Upgrade offers flexible terms for personal loans and is accessible to borrowers with less-than-stellar credit profiles.

  • Accessible to borrowers with bad credit
  • Flexible loan terms
  • Joint applications allowed
  • Direct payment to creditors
  • Secured loan options
  • Has origination fees from 1.85% to 8%
  • No physical branches
  • Higher APRs than some competitors

Upgrade offers personal loans up to $50,000 for qualifying borrowers and is accessible to those with not-so-ideal credit scores. The low loan minimum of $1,000 also makes it an easy choice for those with small financing needs. However, borrowers in certain states will be subject to higher minimum loan amounts. If you live in Massachusetts, Upgrade’s minimum loan amount is $6,400.

While other lenders may offer longer repayment terms of up to 144 months, those are typically reserved for certain loan purposes. Upgrade has repayment terms of 24 to 84 months for eligible borrowers, no matter what expense you’ll be covering. This flexibility can be useful, especially if you’d prefer a longer timeframe to pay off your loan. 

With this lender, you can expect to pay an origination fee between 1.85% and 8%. Borrowers can view their rate before applying without impacting their credit score. 

Overall, Upgrade is worth considering if you’re looking for a lender that offers multiple banking products and loans with competitive rates and flexible terms.

Best for Low Rates


  • Loan Amount: $5,000 – $100,000
  • APR Range: 5.99% – 21.49%
  • Loan Terms: 2 – 12 years
  • Credit Score: 660 or higher

LightStream is an online lender offering no fees and low-rate personal loans for several purposes.

  • Relatively low APRs
  • No origination fees, no late fees
  • Personal loans up to $100,000
  • Autopay discount
  • Joint applications allowed
  • No physical branches
  • Rates and terms vary by loan purpose
  • No soft pull prequalification

Lightstream is Truist’s online lending division, formed in 2019 after SunTrust and BB&T merged. Offering personal loans for several purposes, including debt consolidation, medical expenses, home improvement, weddings, car purchases, and more, LightStream could be worth considering for those seeking flexibility. 

The lender offers relatively low rates compared to competitors, including autopay discounts. Eligible borrowers can get approved for personal loans from $5,000 to $100,000, and loan terms range from 24 to 144 months. Of course, the rate and term you get will depend on the specific loan purpose.

Its personal loans also have no origination fees, which can help keep borrowing costs low. However, borrowers will likely need a credit score of 660 to get approved for a Lightstream personal loan. 

Overall, it’s a good lender to add to your shortlist if you’re looking for flexible funding, no fees, and a low APR. Lightstream may also disburse loans as soon as the same day you’re approved, making this lender a decent choice if you need fast funding.

Best for Quick Funding


  • Loan Amount: $2,000 – $40,000
  • APR Range: 6.99% – 35.99%
  • Loan Terms: 3 – 5 years
  • Credit Score: 640 or higher

Prosper is an online lending platform offering fast funding for personal loans and the option to apply with a co-borrower if your credit isn’t stellar.

  • Can change your loan payment date
  • Option to apply with co-borrower
  • Next-day funding available after approval
  • No physical branches
  • Has origination fees of 2.4% to 5%

Founded in 2005, Prosper is an online peer-to-peer (P2P) lending platform offering personal loans, HELOCs, and credit cards. Because it’s P2P, Prosper works slightly differently than other non-P2P lenders. Borrowers sign up and are assigned a Prosper Rating based on their creditworthiness, and investors can choose whether or not to fund them after viewing their loan listing.

Eligible borrowers seeking personal loans can get up to $40,000 through Prosper with 3- or 5-year repayment terms. Borrowers can expect to pay an origination fee of 2.4% to 5% depending on their Prosper Rating. Funding can be available as soon as the next business day after approval of the loan, making it a solid option in emergencies.

Fortunately, if your credit isn’t stellar, Prosper offers the option to apply with a co-borrower, which could improve your chances of getting a better rate.

Best for Secured Personal Loans

Best Egg

  • Loan Amount: $2,000 – $50,000
  • APR Range: 7.99% – 35.99%
  • Loan Terms: 3 – 5 years
  • Credit Score: 600 or higher

Best Egg provides fast personal loans, including unsecured and secured options.

  • Fast funding for personal loans (as little as one day)
  • Loans up to $50,000
  • No physical locations
  • Has origination fees of 0.99% to 8.99%
  • Good credit and high annual income ($100,000) required for lowest rate

Best Egg offers personal loans of up to $50,000 with repayment terms of 36 to 60 months. You can use Best Egg loans for various purposes, including paying for moving expenses, home improvements, debt consolidation, weddings, adoption and more. Borrowers will pay an origination fee of 0.99% to 8.99%, depending on the amount they borrow and their creditworthiness. You’ll likely need a credit score of 600 or higher to get approved for a Best Egg loan. 

The Challenges of Borrowing While Unemployed 

car parked in front of home

Lenders prefer borrowers to have a steady source of income when qualifying for a loan, as it reduces the risk of default for the lender. This can make borrowing a challenge for those who are unemployed.

Here are some risks and challenges that unemployed borrowers may face when taking out a personal loan:  

  • Missing payments: If unemployment is causing financial hardship and you’re unable to secure another source of income relatively soon, you may end up missing payments. This can lead to other financial issues such as bad credit and the inability to secure further funding. 
  • High-interest rates: Interest rates are a lender’s way to offset their own risk. If you cannot prove income, they might deem you a higher risk and push up your interest rates. In turn, this can make a personal loan unaffordable. 
  • Risk of losing assets: If you’ve put up collateral for the loan, such as equity in your property, your car, or cash in a long-term savings product, defaulting on your repayments can lead to the loss of these assets.  
  • Financial uncertainty: When you’re on the job market again, it’s hard to say when you’ll land your next role. It could be months or even years. The loan you take out may not be enough to last you during the whole unemployment period. At the same time, taking out a larger loan than you can handle is typically not advised.
  • Unfavorable lending conditions: When the lender deems you risky but is still willing to lend, the interest rate is not the only way to do it. They may also shorten the loan terms, which means your installments will be higher. This poses an affordability risk. 

How to Get a Personal Loan If You’re Unemployed 

people waiting to apply for job

Applying for a personal loan on unemployment isn’t much different than applying for a loan when you’re employed. However, you might want to check a few things before applying to ensure you have a better chance of getting approved. Here are some tips to help you get started.

1. Calculate How Much You Need to Borrow 

It’s important to know how much you’ll need before you apply for finance, as you may end up needing a lot less – or worse – a lot more than you think. Consider your necessary expenses, savings, and available income when determining how much you’ll need.  

2. Check Your Credit

The chances of qualifying for a personal loan, especially an unsecured loan, will depend primarily on a borrower’s creditworthiness. Request a copy of your credit report for free to see where you stand. A credit report allows you to see your credit history, repayments, and even your credit score. Good credit history might even land you a great interest rate despite your employment status.

You may also need the following to qualify: 

  • Some form of income or, at the very least, collateral 
  • A low debt-to-income ratio

3. Look for a Cosigner

Some personal loans allow borrowers to have a cosigner or joint applicant. The cosigner should have good credit as well as a steady income, and can be a spouse, family member or trusted friend. Be sure that the cosigner knows that they will be responsible for the loan, so if you miss payments, their credit will also be impacted.

4. Verify Income Requirements

Not all lenders require you to have a salary to qualify for a personal loan. If you have other sources of income such as alimony or rental income, these might qualify too. You’ll want to verify your income sources with a lender, and check if there is a minimum income requirement.

5. Compare Your Options 

If you already have a bank account or other financial products with a lender, there’s a chance that you may be prequalified for other products. Check for any special offers or incentives from your bank.

If you don’t have prequalified options with your existing lender, request quotes from a few lenders to find a good fit. You can go through a quick pre-approval or pre-qualification process, which doesn’t affect your credit score because a soft credit check is performed. Your credit score is only affected once you formally apply for the loan, which is when the lender does a hard credit check.

Compare all of your options to find a loan with the most favorable terms and rates for you. 

6. Prepare Collateral

If your lender insists on collateral and you’re able to provide it, be sure to have that information on hand.

Collateral can include:

  • Vehicle
  • Home
  • Bank account
  • Other assets

In the event you miss payments, the collateral you put up may be at risk.

7. Apply for the Loan 

Once you’ve chosen a lender, submit an application for the loan. You will need to provide all of the necessary documents, including tax returns, bank statements or other verification odcuments. Some lenders allow you to complete everything online, while some lenders may require you to go to the nearest branch to apply. 

What Are the Alternatives If I Can’t Get a Personal Loan?

A personal loan can be an attractive option due to its quick and easy access to funding. But a personal loan may not be right for everyone, or some may have trouble getting approval for one.

There are other financing options to consider, such as: 

  • 0% APR credit cards: A credit card might work as a bridging loan if your balances can be repaid in full before the interest-free period ends. Check out our roundup of 0% intro APR credit cards to help you get started. 
  • Family loan: Parents and siblings might be able to help you weather the storm by covering your costs for a little while. Be sure to keep the channels of communication open and repay on the agreed dates to maintain a strong relationship. 
  • Home equity loan (HELOC): If you have equity in your home, you may be able to tap into it for a loan. It’s possible to qualify for a HELOC if you’re unemployed, but some form of income may still be required for approval. It’s important to note that this type of loan is secured, and if you can’t repay it, you might lose your home. 
  • Contact creditors or utility providers: If you’re having trouble paying your utility bills, contact your utility providers or creditors to explain the situation. Some providers may have relief for you, such as deferment, paused payments, or other financial assistance programs. It doesn’t hurt to ask.
  • Side hustles: Those who are in between jobs can look to side gigs to supplement their income while they’re on the job market. Driving for Uber or getting a part-time job can offer flexible schedules and additional streams of income.

Should You Get a Loan While Unemployed? 

Each person’s financial situation is different. A personal loan can be a helpful financial resource during a time when you need it, but there is also a risk of not being able to repay the loan due to a lack of income. If you are able to handle repaying the loan and are confident you’ll land a job soon, a personal loan can make sense to help you cover short-term costs. If you’re unsure how much you’ll need and when you’ll be able to work again, a personal loan might not be the best option at this time.


Will banks approve me for a personal loan if I’m unemployed? 

Employment is not necessarily a factor when applying for a personal loan. However, some banks may have an income requirement. This income can be from other sources such as pensions, alimony, and child support. If this isn’t available, banks may still approve the loan if there is sufficient security to cover the risk. 

Is it a good idea to apply for a personal loan if I’m not employed? 

The decision should be based on one’s financial situation. If an individual has sufficient means to cover the loan repayment plan during the unemployment period, applying for a personal loan during unemployment may work out. A personal loan may also be reasonable if an individual’s unemployment situation is just temporary and there is a new job is already lined up. Individuals who are financially struggling and do not have the means to repay a loan should avoid taking out extra debt.  

What can I do if I don’t qualify for a personal loan at the bank?

If you do not qualify for a personal loan at your bank, consider putting up collateral or finding a co-signer to help improve your chances of approval.

There are also other alternatives to consider, such as borrowing from family, zero-interest credit cards, and government assistance programs that target those who are struggling financially.

While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.

Slickdeals Staff
Slickdeals Staff
The Slickdeals Money editorial team is dedicated to helping readers navigate the personal finance space. Our team boasts decades of knowledge on credit cards, banking, travel points & miles, personal loans and more. We’re passionate about educating our readers on the very best financial tools & products on the market today.

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