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Can I get a personal loan without a job?

It’s possible, but you’ll need to show the lender that the loan will be repaid

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Upstart
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Proof of income is one of the main eligibility criteria for taking out a personal loan. That’s because lenders want to ensure you’ll have the funds to repay them. But what about if you’re low-income, on an irregular income or don’t have a job at all? Can you still borrow money?

While it is possible to get a personal loan without a paycheck, it can be harder and more costly. Here’s how to get a loan, where to find available loans and alternative options you may want to consider.


Key insights

  • You don't need to have a traditional W-2 job to qualify for a loan.
  • Other sources of income can be used, like self-employment, retirement, alimony or unemployment benefits.
  • Consider getting a co-signer with a steady income, sufficient assets and a good credit score.
  • Improve other aspects of your finances to strengthen your application.

How to get a personal loan without a job

Even if you don’t have a traditional W-2 job, you may have other sources of income that can qualify you for a personal loan. As long as your income is recurring and relatively consistent, it could serve as a source of repayment that a bank is looking for.

Or, if you don’t have regular income, some lenders may still allow you to borrow based on the value of your assets.

Jon Morgan, CEO of Venture Smarter, recommended "leveraging your assets, such as property or investments, as collateral." He also said that "showcasing a strong credit history and adding a co-signer can improve your chances of obtaining a loan."

No matter which method you choose, be certain that you’ll be able to comfortably repay the loan. A reputable lender should only lend you what they feel is an appropriate amount for your situation, but it’s also up to you to make sure you can manage the repayments.

Consider all of your income sources
Although you may not have a regular paycheck, you may have other sources of income that qualify you to borrow. These sources may include self-employment income, alimony, pensions, Social Security, rental income, gig work and more.

Jane, a reviewer from South Carolina , was able to access a loan thanks to income from a court settlement: “I let him know what my situation was or what my background was and the kind of job that I had and what my income was now and why I needed the money, and that I would be paying it back very shortly. ‘Cause I'm expecting a settlement in a case I got going. So, it didn't take him any time to investigate to make sure I was legit. The next thing I know, he’d approved me.”

Use your spouse's income
If you don't have a job but your spouse does, you may be able to use their income as part of your overall household income. However, your spouse may need to co-sign on the loan.

This is what Audrey, a reviewer from New Mexico , did after struggling to secure a loan: “... my income was not quite enough but they allowed my future husband to co-sign.”

Get a co-signer
A co-signer provides their income and credit score to boost the strength of your credit application. The co-signer could be a spouse or partner, or someone else like a family member or close friend.

Just remember that the co-signer is also responsible for repayment of the debt in the event you stop making payments. To avoid strained relationships and damaging both of your credit scores, make sure you can keep up with payments.

Use your assets as collateral
When you cannot provide income verification, some lenders allow you to borrow against the value of your assets with a secured loan . Examples of collateral may include your home equity , automobile , investments, certificates of deposit (CDs) and other valuable possessions.

The downside of putting down collateral is that if you default on the loan, you’ll lose that asset. Make sure you’ll be able to repay whatever you borrow.

Have strong credit (or improve your credit)
Lenders look at many factors when reviewing credit applications. Good to excellent credit scores can strengthen your application to help a lender overcome your lack of a job.

If your credit score is on the lower end and you have the time, take steps to improve it before applying for a loan. While this may mean waiting longer to take out money, it’s worth it, as a higher credit score can mean lower interest rates and better terms on your loan.

Reduce your monthly expenses
Lenders consider your debt-to-income (DTI) ratio when determining whether you can afford to take on more debt. Before you apply for a personal loan, pay off smaller debts or consolidate them into a single loan to reduce your monthly debt obligations.

Again, this may mean waiting longer to take out a loan, but it’s better than getting yourself into a situation where you owe more than you can realistically repay.

Where to get a loan with no job

There’s no standard minimum income requirement for personal loans, and most lenders aren’t very transparent about their income criteria — which can make shopping for a loan difficult.

However, it’s not impossible. If you can prove your ability to repay their loan, the following types of lenders could be a source of money even when you don't have a job.

  • Banks and credit unions: Don't be afraid of applying to a traditional bank or credit union. Many will consider other types of income and assets when reviewing your loan application.
  • Online lenders: Online lenders don’t have the same overhead as brick-and-mortar banks and credit unions, which means their loans often have lower interest rates and fees and less stringent criteria. For example, Upstart only requires a minimum annual income of $12,000 for its personal loans.
  • Loan aggregators: Online marketplaces allow borrowers to submit one application and get offers from multiple lenders. This prevents you from having to go through multiple credit checks, and since you’re casting a wide net, you may find lenders you weren’t familiar with that offer more lenient criteria.
  • Peer-to-peer (P2P) lenders: P2P lenders aren’t as common as they once were, but there are still a few out there. With P2P loans, investors purchase part or all of your debt and earn interest or fees on the loan, just like a regular lender would. On these platforms, borrowers often indicate what the money is for and provide a backstory, which enables investors to make a decision without focusing strictly on income and credit scores.

Just be sure to read the fine print of any loan before you commit, and steer clear of predatory lending, such as payday loans and title loans, that may promise quick and easy funding but at a high cost.

“Acquiring a loan without a job can carry significant risks, including higher interest rates and stricter terms due to perceived instability,” warned Morgan. “Failing to repay such a loan could damage your credit score and financial credibility in the long run."

» COMPARE: Best personal loan companies

Alternative ways to get a loan with no job

While it is possible to get a loan without having a job, the hard truth is that many lenders simply won’t lend to you. This is especially true if you can’t prove a way to repay the loan, such as through collateral, a fixed income or a co-signer.

In this situation, you’ll need to consider other financing methods. Here are some alternative options to borrow the money you need.

Margin loan against investments

Many brokerage and financial services companies allow investors to borrow against their investment balances. These loans typically offer low-interest loans for up to 50% of your investments.

However, if your investments decline in value, you may be forced to sell a portion or deposit additional money to bring your loan back into compliance.

» MORE: Using your 401(k) to pay off debt: What are your options?

Borrow against cash value life insurance

Insurance companies allow policy owners to borrow against their cash value life insurance policies. These loans do not require underwriting or credit checks, and many don't require monthly payments.

However, if the policy expires, the loan is treated as a withdrawal and may be subject to taxes. Additionally, if there's a balance outstanding when the insured dies, that amount is subtracted from the death benefit.

Borrow from friends or family

Friends and family with available cash may be willing to lend you money. But before pursuing this path, know that this loan type could affect your personal relationships.

The IRS requires you to create a formal loan agreement, including a repayment schedule and interest rate. If your lender does not charge the minimum applicable federal rate (AFR), the government may tax them on interest they didn't charge. To avoid this scenario, it may be better for your family or friend to consider it a gift instead.

» MORE: Using gift money for a down payment

What do you prioritize most?

FAQ

Is alimony considered income for a loan?

Alimony is the recurring income a divorced spouse pays to their former spouse. Recipients are not required to disclose alimony payments, but it can be used as income to support a loan application.

Can I get a loan if I’m self-employed?

Yes, self-employed people can use their business income and profits to qualify for loans. Since they typically don’t have a regular paycheck, self-employed borrowers often need to provide additional documents to verify their income. Instead of pay stubs and W-2s, self-employed borrowers typically need to provide tax returns, bank statements and a recent income statement.

Can I get a loan if I’m retired?

Borrowing money isn’t just available to working-age people. Retired workers can also qualify for loans based on their income and assets. Qualifying sources of income may include Social Security, interest income, investment income, rental properties and more.

Bottom line

Having a steady paycheck is not the only way to get a personal loan. Lenders also consider your assets, your credit score, any alternative sources of income and other factors when analyzing loan applications.

However, there are ways to improve your odds of approval, including boosting your credit score, paying down other debts and getting a co-signer.


Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. Consumer Financial Protection Bureau, " Is a lender allowed to consider my age or where my income comes from when deciding whether to give me a loan? " Accessed Sept. 24, 2023.
  2. Capital One, " Applying for a loan when you’re unemployed? " Accessed Sept. 24, 2023.
  3. IRS, " Earned Income and Earned Income Tax Credit (EITC) Tables ." Accessed Sept. 24, 2023.
  4. SoFi, " Getting a Personal Loan While Self-Employed: How to Apply ." Accessed Sept. 24, 2023.
  5. Charles Schwab, " Family Loans: Should You Lend It or Give It Away? " Accessed Sept. 25, 2023.
  6. Experian, " How to Get a Loan if You Don’t Have a Job ." Accessed Sept. 25, 2023.
  7. Charles Schwab, " Margin: How Does It Work? " Accessed Sept. 25, 2023.
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