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Emergency Loans for Unemployed People: Getting Cash Without a Job

Even without full-time income, there are loan options.

Justin Cupler

Contributing Writer at Tally

June 8, 2022

Unemployment often sends your finances into a spin as you juggle your bills with the limited income you get from unemployment and other sources. 

To ensure your financial security during a job loss, you may need to look toward a loan. But finding emergency loans for unemployed people can prove difficult due to the lack of steady income from a full-time job. 

Fortunately, there are ways to get an emergency loan as an unemployed person. Below, we’ll explore how to qualify without employment income, where to find these loans and some alternatives to traditional personal loans. 

Qualifying for emergency loans for unemployed people

When getting a personal loan, there are a few items virtually all lenders need to see, including a decent credit score and steady income. When you’re unemployed, showing a steady income poses an issue, but it’s not a deal breaker. 

If you can prove you have regular income from other sources and have good credit, you may be able to be approved. Lenders may consider alternative income sources from places other than an employer. 

Here are a few examples of regular income that may help you qualify for an emergency loan while unemployed.

Social Security 

If you’re unemployed because of an underlying medical issue or retirement, there’s a chance you have, or are eligible for, regular income from Social Security. 

Though you don’t have a job, Social Security income can help you get approved for the personal loan you need.

Unemployment benefits

As a full-time employee, a portion of your paycheck goes toward funding unemployment insurance. When you lose your job through no fault of your own, you may be eligible for various unemployment benefits. One of these benefits includes a weekly paycheck. 

Yes, unemployment benefits cover only a portion of what you can earn as a full-time employee, but they can help you qualify for that emergency loan. 

Alimony or child support

If you collect alimony or child support, this may qualify as regular income and could help you get approved for an emergency loan as an unemployed person. 


Spouse’s income

If you’re unemployed but your spouse is still working, their income can help you get the personal loan you need. There is a catch though: To include their income, they must be a cosigner on the loan. Having a cosigner can help in other ways that we’ll touch on later. 

Pension or retirement income

If you’re retired, you may not be gainfully employed, but you may have a regular income. If your company provided a pension that you’re collecting, many lenders consider this regular income for loan approval. The same goes for any other retirement income, including 401(k) and IRA distributions. 

Recurring interest

If you have an annuity or other investment account that pays you regular interest, you can use this interest as income on many loan applications. 

For example, if you have a $100,000 annuity that pays an average of 6.5% interest, you can claim up to $6,500 as regular annual income to get approved for a personal loan.

Finding emergency loans while unemployed

Like any personal loan, there are plenty of financial institutions offering emergency loans for unemployed people. Below are some common options for seeking an emergency loan. 

Bank or credit union

The first option is to work with an institution you’re familiar with, so head to the bank or credit union you frequent. Because your bank or credit union has worked with you for a number of years, it may be more flexible with its approval terms. 

There may be some additional requirements to get approved, like opening a certificate of deposit — a savings account that requires you to leave your cash in it for a fixed period of time in return for higher-than-average interest payouts — or auto-drafted loan payments, but this may relax the income or credit score requirement. 

Direct lenders

The internet doesn’t lack online lenders. A quick search will turn up literally thousands of options, including many direct lenders. 

Direct lenders are those who lend the money directly to you; there is no middleman or additional markup on the loan, and you’ll make the payments directly to the lender. 

You can apply to these lenders one by one. This can be a time-consuming process for those with bad credit, but if you shop around, it generally nets you better loan terms, including lower interest rates and loan fees. 

Loan aggregators

An internet search will also connect you with many online loan aggregators. These companies don’t offer personal loans themselves. Instead, they submit your credit profile to a wide range of lenders in hopes of getting you a loan. 

Once an aggregator locates a loan, it adds a one-time fee and then offers the loan to you. Once it’s all said and done, you will likely never hear from the aggregator again, as you’ll make all your payments to the lender. 

These aggregators are convenient because they submit your credit profile to many lenders at once, but this can also result in multiple hard credit inquiries, which can hurt your credit score. Also, you’ll need to consider if the 10% fee is worth it to you, especially if you’re seeking a higher loan amount. 

If you prefer to avoid these pricey loan aggregators altogether, there are a few telltale signs that will let you know you’re dealing with a loan aggregator rather than a direct lending institution: 

  • They will refer to lenders as “lending partners” or something similar.

  • They will not quote you a loan until they contact their partners.

  • They will ask you to sign a document agreeing to their fee before they start searching for loans for you. 

Getting emergency loans with bad credit

Getting a personal loan generally requires at least a decent credit score. If you have bad credit, this can limit your ability to get an emergency loan while unemployed. 

Fortunately, there are a couple ways to get emergency loans for unemployed borrowers with bad credit. 

Get a cosigner 

A cosigner is a person with a good credit score who signs on the loan with you. Though they may not make the monthly payments, the lender holds them equally financially responsible for the personal loan. 

As we mentioned above, this cosigner can also help you get approved because the lender may consider their source of income in the approval process. 

Keep in mind that a cosigner is also responsible if you default on the loan. That means if you miss a payment, it could result in a blemish on their credit report. Consider this before asking someone to be your cosigner.

Lower the loan amount

In some cases, the issue holding up your personal loan approval is the loan amount. If your creditworthiness can’t support the loan amount you’re applying for, try reducing the requested amount and reapplying. 

Finding alternatives to traditional loans

If you’re struggling to find an emergency loan due to a poor credit score or income issues, there are a few alternative loans to consider. These may not be the ideal personal loans you’re looking for, but they can help fill the financial void in a pinch. 

Home equity line of credit

A home equity line of credit (HELOC) leverages the equity in your home — the amount the home is worth minus the balance of your mortgage on the property — to give you access to a line of credit for a certain amount of time. 

A HELOC generally has a draw period — which is the amount of time during which you can use the credit line — of 10 years. Once those 10 years are up, the line of credit closes, and you must start repaying what you borrowed. 

While a HELOC offers you a low interest rate, gives you access to flexible cash and taps into an asset you already own, it’s far from perfect for a few reasons: 

  • It puts your home up as collateral, so if you default on the loan, you may lose your house. 

  • It has many of the same income requirements as a personal loan.

  • A HELOC typically requires at least a 680 FICOcredit score, according to the credit bureau Experian. So a bad credit score may prevent you from getting one.

Car title loan

A car title loan is another way to access emergency cash using an asset. Instead of using your home equity like a HELOC does, a car title loan uses your vehicle. 

The lender uses your free title — one not tied up by a lien from a bank — as collateral on a short-term loan. This is known as a secured loan because it’s secured by your vehicle’s value.

Other than requiring a vehicle without a loan or other lien on it, these loans often have minimal eligibility requirements. 

A car title loan may seem like a great option on the surface, but the FTC warns consumers to steer clear if possible. They often have high interest rates in the triple digits, according to the FTC. This high APR is usually due to the additional fees these lenders charge, including up to a 25% monthly charge just for financing the loan. 

If you run into hard times and have a late payment on a car title loan, the lender may also repossess your vehicle, making it difficult to get around and find work. 

Credit card cash advance

A credit card cash advance is a short-term loan issued by your credit card. It’s relatively easy to get and requires no credit check or proof of income. 

You can get a credit card cash advance from an ATM using your PIN (personal identification number). If your card issuer didn’t give you a PIN, you may have to call the customer service number on your credit card or go to the issuing bank to get the advance. 

While a cash advance provides quick and easy access to emergency cash, it comes with a few downsides: 

  • Cash advance interest rates are generally at least a few percentage points higher than the base rate for using your credit card for purchases. 

  • Your credit card may charge a fixed fee of $20 or more for each cash advance.

Payday loans for unemployed persons on benefits

A payday loan is a type of cash advance that leverages future income. These short-term personal loans give you the cash you need now. If an emergency pops up, and you need to borrow $100 until your next unemployment check arrives in a week, a payday lender can offer quick cash without a credit check.

To get that $100 payday loan, you just write out a check for the amount you need plus the lender’s fee. So if the fee is $15, you would write a $115 check. The lender then gives you the $100 cash or deposits it into your bank account. 

The lender won’t deposit the $115 check until the agreed-upon due date, which is usually your next payday. If you can’t afford to make the payment when it’s due, the payday lender may agree to roll the loan to your next payday for another $15 fee. 

This may sound convenient, but the FTC warns consumers to use caution with these lenders. The biggest issues are in the repayment terms, as that $15 fee adds up to 391% APR on a 14-day payday loan. The APR continues to balloon each time you roll it over. 

Consider how emergency loans will affect your future

Emergency loans for unemployed people may be challenging to qualify for, but they’re far from impossible. In many cases, the hardest part is determining what does and doesn’t qualify as income for the various types of loans available. In most cases, any steady flow of incoming cash counts, including alternative sources like alimony, child support, recurring interest or your spouse’s income.

If all else fails, there are alternative cash loans available that require almost no income verification and don’t consider your credit history, including payday loans, cash advances and car title loans. It’s recommended you proceed with caution when considering these options, but with a firm understanding of the risks, you’re in a position to make an educated decision as to whether these loans are right for you.

As you navigate the uncertainties of unemployment, remember to look to the future. Consider how your loan choice will affect both your current and long-term financial security. A loan with good terms may provide the support you need to get through the current crisis and see a better tomorrow. 

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