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Whether you owned a business and had to close shop due to COVID-19 or worked for someone else and were laid off, you may currently be going through a rough time. In addition to figuring out your next move, you probably have 1,000 thoughts running through your mind, including wondering about what's going on with unemployment compensation. You may even be worried that your unemployment income won't last long enough to get you through.
If that's the case, you may wonder if you can get a personal loan while unemployed, and the answer is yes. We can't tell you with certainty when life in the U.S. will get back to normal, but we can show you how to get a personal loan while unemployed.
If you're one of the millions of unemployed individuals impacted by COVID-19, you might qualify for a coronavirus hardship loan. To learn more about this type of financial assistance, visit our coronavirus hardship loans page.
Your ability to get a personal loan doesn't depend on your employment status, although it might seem that way at first. Here's how to get a loan while you're out of work:
The income you use to repay the loan debt does not have to come from an employer. The best personal loan lenders understand that everyone's situation is different.
A lender will consider any of these as income:
If you don't have a steady income, ask your lender if you can use something of value as collateral. When you get a loan with collateral, the loan is known as a secured loan, and lenders can take this collateral if you're unable to pay. Examples of collateral include:
Personal loans that don't require collateral are known as unsecured loans. With unsecured loans, the lender can't take your house, car, or other possessions if you miss payments. But unsecured loans are harder to get approved for. If you're struggling to get approved for a loan, find out if your preferred lender offers secured loans.
A personal loan can be used for anything -- if you have debt piling up, you're probably focused on things like:
Generally, you'll need a score of 580 or higher to qualify for a personal loan (Although the credit score needed for a personal loan varies by lender and it may be possibly to qualify with a lower score).
If you need an emergency loan and don't have time to improve your credit score, you're not alone. Look for loans for bad credit. These lenders will have experience working with low-credit borrowers and will be more likely to approve you for a loan.
Yes, if you need it -- and if the payments won't add additional worry to your life.
If you can't afford to make the monthly payment on a loan, look for a less stressful way to cover expenses. You are likely more stressed right now than you have ever been in your life, and if adding one more bill to your life adds more strain, take care of yourself by not taking on the obligation.
Below, we'll cover some alternatives that might be less stressful than a loan.
Here are a few options to look into if a personal loan isn't the best fit for you.
Since the pandemic, people have been able to find more financial assistance from:
If you're struggling to keep up with your bills, call your creditors and explain your situation. They may offer paused payments, deferment, forbearance, new repayment plans, or other forms of financial relief.
If you had a low-interest credit card before your job loss, check the current interest rate to make sure nothing has changed. If you're sure you can manage the monthly payment, consider using it as an emergency loan.
If you're in a bind, call your investment or retirement account manager to learn if you can borrow from your account. When you borrow from an investment or retirement account, you don't need to worry about credit score requirements or interest rates. You will give up the interest you could have earned from keeping your money in your retirement account, but that's a small price to pay for peace of mind and having your bills taken care of.
There's not a person in our country who has not been impacted in some way by the pandemic. If you have family and friends on solid financial footing, consider asking for a loan to get you through.
You are naturally concerned about your life, family, and finances. If a personal loan can help you through this time without adding additional stress, consider it as a loan option.
Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.
Yes, you can get a personal loan. Unemployment benefits count as income. If you're having trouble getting approved, you can put up collateral to get a loan.
For most loans, you'll need to be able to show other sources of income, such as unemployment benefits or child support. If you don't currently have a source of income, you can try putting up collateral (like a car or savings account) instead.
Yes, if you need it and if the payments won't add extra stress to your life. If you don't know whether you'll be able to make the payments, take care of yourself by considering less stressful options (like borrowing from a retirement account) instead.
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