Online Loans for Unemployed People at GreenPlaceLoans
Being unemployed sucks and life can still happen while you are between jobs. What if you need some car repairs to make sure you can actually get to a new job?
Money is probably generally in short supply at such a time. A sudden need for funds can look really intimidating.
You may think it is impossible to get a loan while unemployed. While it is certainly challenging, it isn’t outright impossible.
However, it’s even more important than usual that you do your due diligence. In most cases, taking out a loan while unemployed is even riskier than usual.
So you need to be clear about why you are taking out this loan, how much you need and how you are going to pay it back. But this is the very first question you should ask yourself:
Do You Really Need A Loan?
You may feel like you just need some fast cash and a loan may seem like the obvious answer, but first do some brainstorming and see if you can handle your situation without borrowing. Here are a few ideas to consider before you apply for a loan while unemployed:
- Call 211 to find local emergency relief.
- Apply for food stamps or other welfare programs.
- Find local food pantries and other emergency relief sources.
- Ask friends or family for a gift of cash, such as an early birthday or Christmas present.
- Look for free meals at local churches.
- Have a yard sale or sell stuff on eBay.
- Look for gig work that can get you quick cash, even though it probably won’t pay well.
- Collect recyclables and cash them in.
Also, you may go over your budget and see if you can cut back somewhere
- Cancel magazine subscriptions.
- Cancel premium cable channels.
- Reduce your minutes, text messages or data allowance on your phone.
- Find a cheaper source for groceries.
There are a few things you should keep in mind. For example, if you are getting an unemployment check, you may not be able to do gig work. That may count as “employment” and end your benefits while not providing enough to live on.
But you should still be able to sell personal items, get free meals from churches and ask friends and family for gifts. If you are getting any kind of means-tested benefits, make sure you understand the potential consequences before you pursue any particular avenue of remedy.
If you can manage to reduce your expenses and also come up with some extra resources, you may find you aren’t as cash strapped as you thought you were. Even if you still need a loan, you may be able to revise your estimate of how much you need.
Loans for the unemployed tend to have high-interest rates.
They may also have other fees to try to protect the lender from a fairly high default rate in comparison to other loans.
In part because of the higher interest and fees, borrowing less money is a good way to minimize the risk to your financial future. It will make it more likely you can pay the loan back and it will reduce how much it costs you.
So even if you do end up applying for a loan, do not skip this step. Whatever your path forward, it will help you whittle your problems down to a more manageable size.
Know Why You Need a Loan for Unemployed
You will need to explain to the lender why you want to borrow money while unemployed. You will need to make a really good case as to why this makes sense as a course of action.
Do you plan to use it as a consolidation loan to ease your cash flow situation? This may make a lot of sense and help improve your ability to cope.
A consolidation loan can potentially reduce the amount of interest you are paying on existing obligations. It may also lower your payments, thereby freeing up much need cash.
Are you expecting to start a new position soon and just need a bit of cash to tide you over temporarily? This can be a very strong argument for getting a loan.
Just make sure it is not a pipe dream. You need to have something lined up with a high degree of confidence.
Are you making a life change to resolve your issues and need some running money to facilitate it? For example, are you moving someplace new to start college or join the military?
Generally speaking, no lender wants to hear that you just want money because you are broke. They want to hear that you are solving your problems and this money will help you solve them, thereby making it that much more likely that you will actually be able to pay them back.
Ideally, this should be a “bridge” loan that will help you cross some financial chasm. In other words, you should have some idea of how long that time period will last and how it will end.
It should not be intended to simply pay your bills when there is no end in sight. That’s an extremely good way to dig a hole you cannot escape. If you are in such a situation, you need to revisit the above list of potential sources for emergency relief and work hard at locating resources that will not need to be paid back.
Types Of Loans for Unemployed
You may not qualify for a personal loan while unemployed. Such loans are based mostly on your ability to repay and on your credit score.
But that isn’t the only type of loan that exists. Here are some options you may not have thought about that may be easier to access than a personal loan:
If you have assets, you may be able to use them to get a loan on the strength of their value. Also, if you have small valuable items, like jewelry or electronics, you may be able to borrow money against them at a pawn shop.
When you own a car free and clear, you may be able to get a title loan. If you have other tangible assets, like land or stocks, you may be able to borrow against their value instead of selling them outright.
Secured loans tend to have easy terms compared to personal or signature loans, plus less paperwork. They may also have lower interest rates.
You could also consider selling such assets, but you may have valid reasons why you don’t want to sell them. For example, you may need your vehicle to get to a job that you have lined up. A title loan may be able to tide you over while preserving your access to transportation.
If you have a retirement fund, you may be able to withdraw money from it temporarily as a loan. For example, you may be able to borrow up to 50 percent of the vested amount in your 401k.
Do keep in mind that this does need to be paid back. It may be easier to access than a personal loan while unemployed, but the same general rules apply.
- Don’t borrow more than you really need.
- Make sure you are working to solve the underlying financial issue so you have the ability to pay it back.
- Read up on how this works and make sure you fully understand it, just as you would a regular loan contract.
Whole Life Insurance Policies
Not all life insurance policies are created equal. If your parents took out a whole life policy on you at a young age, you may be able to borrow against its value.
You may not even know you have such a policy in your name. Before you borrow money while unemployed, ask your parents if they have a whole life policy on you.
The great thing about borrowing against an insurance policy is that it is almost like pulling money out of a savings account. Unlike a savings account, there is a requirement for you to pay it back.
However, you really don’t need to “prove” anything to them. You are pretty much free to access it at will with a minimum of paperwork.
Do keep in mind that if it isn’t paid back, it will reduce the benefit to the beneficiaries. There can also be tax implications and other issues.
If this is a completely new idea for you, you should do some reading. You could start here.
If you have a friend or relative that trusts you, you may be able to get a loan with a co-signer. It will be based in part on their credit score and ability to repay instead of solely on yours. This can make a big difference during a time of crisis.
If you don’t repay, the lender will get the money from the co-signer. Of course, if you can’t pay it back, you may permanently burn bridges with this person.
If they were willing to outright gift you the money, they could have done so without signing a loan agreement. So do not assume this is a gift from them.
It isn’t a gift. It is a pledge of trust that you need to honor if at all possible.
If you feel fairly confident you can really come up with the money, a friend or relative may be easier to convince than a bank. They may know that you are good for it and just having a cash flow issue. The bank may not believe that, but may still lend you the money on the strength of your friend’s willingness to co-sign.
A Second Mortgage Or Line Of Credit
If you own a home and have equity in it, you may be able to draw upon the equity in your house. An equity line of credit can work similarly to a credit card while being secured by the value of your home.
Of course, you are potentially putting your house at risk. But if you are in danger of missing mortgage payments, it may already be in danger.
Preparing To Apply
If none of the above options is available to you, you may still be able to get a loan. But you need to be prepared to do more research than usual, fill out more paperwork than usual, answer some hard questions and back it up with documentation.
You may be unemployed, but are you really completely penniless and without an income? Alimony, income from a Patreon account or other sources of income may be used to qualify for the loan.
Be prepared to have bank statements showing the income. If it is earned income from an unusual or unsteady source, you may need a few months worth of statements instead of just your most recent bank statement.
Crunch some numbers and be very clear how much you really need, why you need it and how you plan to spend the funds. Don’t cut any corners.
You need to understand that not all lenders will be amenable to making a loan to someone who is currently unemployed. So you may need to start by listing every possible lender in your area.
Expect to get told “no” a lot. Call around and ask, but expect that the answer is simply “no” in many cases.
You can also apply online for a loan. A matching service can allow you to fill out one application that will be seen by multiple lenders. This can improve the odds of finding a lender willing to work with you.
As with any loan process, if you do potentially qualify for multiple loan products, you should read through everything carefully and pick the one with the most favorable terms. Don’t rush this part just because you are unemployed and stressed out about money.
If you are looking to apply for an online loan, you can start that application right here and now from the privacy of your home. Ideally, you should first make sure you have gathered together the pertinent documents and are prepared to answer a lot of questions.
We will do our best to find both a lender and a loan product that meets your needs. If you qualify, you may be able to get the funds directly deposited into your bank account within a couple of business days.