The ability to take out loans is something that many Americans take for granted. However, for many of us, it’s not so simple. Trying to get a loan when you don’t have a job is tough. Trying to get a loan when you don’t have a job, and you also have bad credit is extremely tough. The great news is that it’s possible.
Many people find themselves in one of these situations. Fortunately, one of the strengths of capitalism is that where there is demand for something, in this case, no-income loans, there will be entrepreneurs who create the supply. Here’s some sage advice for how to navigate the process of getting a no-income loan.
When you’re unemployed, you can often feel like you have no options. You have gone to traditional banks and lending institutions, and they have quickly rejected your applications because of your lack of a job.
Know Your Options for Loans When You Don’t Have a Job
The first thing we are here to tell you is that there are options. There are several online lenders which have applications that you can fill in for no cost. Just remember, they will not reject your application automatically just because you have no employer, but you will have to add in some additional details on your application to help your cause.
Not having a formal employer does not mean that you have no forms of income. If you’re receiving any financial support from your family, then this can be mentioned in your application. The same thing goes with any assets you own that are generating any income streams, or any benefits or other forms of compensation you may be receiving. The critical point here is that no matter how insignificant you may find them; they will still help your loan application.
Applying for Your No Income Loan
The other factor that will help your application be successful is the amount of principal that you ask for. Applying for a loan is not the time to be greedy. Spend some time thinking about how much you honestly need. The smaller the amount, the more likely that you will be approved.
Hopefully, once you’ve applied for a number of these online no-income loans, you will have several different loans approved. Make sure to spend time at this point, evaluating the differences between the loans. There will be stark contrasts between different lenders in the terms and conditions they offer, and you want to make sure you don’t pick the most attractive interest rate and miss the fact that they are hidden fees or penalties for paying your loan off early.
The most crucial step in your loan process is after you’ve been approved. The lender will stipulate what your monthly repayments are. In your evaluation of the different loan offers, you’ll have made sure to select one that has a repayment amount that you can make each month. It’s imperative to do so now. If you default or make some late payments, this will further hurt your credit score and make it more difficult for you to get a loan in the future.
As we mentioned at the top, many people who are struggling to get a loan due to the lack of a job, usually have a lower credit score. This can make obtaining a loan even more difficult.
If you go through all of these steps and still can’t find a lending institution that is willing to issue you a loan then don’t panic. There are still some final options for you. We don’t recommend these as a long-term solution because these loans are intended to be used for a short-term.
Title Loans Without a Job
You can use your physical assets as security on the loan. If you have a car that is in your name and fully paid off, then you can use these as collateral. The advantage of title loans without proof of income is that lenders will be much more likely to issue you a loan. The most significant disadvantage is that you could lose your car if you default on the loan.
Payday Loans with No Income
Another option is payday loans. Payday loans might get a bad reputation, but they have a high approval rate. The major drawback is that interest rates are higher than most loans. If you choose to go with one of these companies, make sure you can afford to make the payments and avoid rolling over your loans.
We know that your situation can seem desperate when you are unemployed and urgently need a loan. The traditional banking system is not set up to deal with people who are unfortunate enough to find themselves in this situation, most times through no fault of their own.
Now that you have learned that there are a host of options available, you can make a better decision. Remember not to panic, and to systematically go through the loan terms one by one without hastily jumping on the first loan that is offered to you. If you make the right choices, this no-income loan could be the first step towards your financial stability.