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Document your income
Any income you receive could help you qualify for an unsecured loan. You’ll have to provide documentation, such as a recent statement. Lenders may consider:
- Child support
- A pension or annuity
- Social security
- Required minimum distributions from your retirement accounts
- Spouse’s income
Being able to document some kind of income could mean the difference between getting an unsecured vs. a secured loan.
Document your assets
If you don’t have enough income to qualify for the loan, you might be able to qualify for a secured loan based on your assets instead. Here are examples of assets a lender might consider:
If you plan to use jewelry, artwork, or collector’s items as collateral, the lender will require a professional appraisal and may ask for physical possession of the item until the loan is repaid.
Check with your bank
Credit unions and banks usually have secured loan options. Virtually all will consider different income sources for an unsecured loan. Only credit unions offer payday loan alternatives (PALs).
Check online lenders
An online loan is similar to a loan from your local bank. They will usually consider income sources other than employment. Many popular online lenders offer unsecured loans only, but you will find some that specialize in secured loans.
Avoid predatory loans
Title lenders make loans using your vehicle as collateral. Payday loans charge enormous fees. These are considered predatory loans. They are very expensive, and you can end up paying back many times the loan amount.
If you default on a title loan, the lender can take your vehicle (but risking your collateral is true for any secured loan). For some payday loans, you can’t miss a payment because the lender will automatically take the money out of your bank account on payday, even if you need it for other expenses.
Check rates and fees. Depending on your circumstances, not having a job could make you look like a more risky borrower. That could cause them to charge you higher rates and fees for an installment loan.
What to do if you’re not approved
If you aren’t approved, you can try lowering your loan amount or talking to the lender to find out how you might be able to qualify. Be careful about applying with several lenders, as each application has the potential to damage your credit score. Many lenders offer information based on a soft pull, which doesn’t affect your score. Take advantage of that when you can.
If you don’t have income or assets, you will have a hard time getting a personal loan. In that case, you will need to re-evaluate your needs and consider other strategies.
Besides asking a family member or friend for a loan, you could also ask someone to be your cosigner. This means you are asking that person to take responsibility for — and repay — your debt. You could inadvertently give someone you care about a new financial problem if you are unable to repay your loan.