Unemployed? Emergency Loans Are Still Within Reach

Unemployed? Emergency Loans Are Still Within Reach

Unemployment can lead to a distressing financial situation. Even if you carefully built an emergency fund for situations like this, eventually, the funds will run out.

If you don’t have a new job lined up and cannot keep up with your expenses, then turning to a personal loan while unemployed could be an option for you.

Although not all unemployed individuals will qualify for a loan, some lenders are willing to work with you. If you can find the right loan, then it could give you the financial breathing room you need while you continue searching for a new job.

How unemployment affects loan eligibility and terms

In most cases, unemployment means that you’ve lost all of your income or at least the majority of it. With that, it is not surprising that your unemployment will affect your loan eligibility and terms.

A lower income is not the only way that your loan eligibility could be affected. With a lower income, your debt-to-income ratio will likely be affected. At that point, your credit score could take a hit because your debt-to-income ratio is a major component.

Essentially, this amounts to a double whammy effect on your ability to take out a loan. You’ll likely find that most lenders aren’t willing to work with you. Those who are willing to help you out with a loan typically require large interest charges for that opportunity.

As you continue to explore your loan options while unemployed, keep in mind that you probably won’t have access to the best loan terms. But you will likely be able to find a loan that helps get you through the financial hardship.

What types of loans are available for people with little to no income?

If you have no income, then your loan options will be limited. But a few that you can pursue include:

  • Personal loans. Personal loans often are available to those who are unemployed. But you’ll likely be facing higher interest rates due to a less attractive application. However, this issue could be solved by finding a cosigner with a good credit score and stable income to vouch for you. …