UPDATED: Jun 23, 2022

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Written By: Sara RouthierReviewed By: Joel OhmanUPDATED: Jun 23, 2022Fact Checked

Borrowers can get a personal loan while unemployed, but it highly depends on the lender’s discretion.

When lenders decide if a borrower is a suitable applicant, the likelihood of repayment is paramount. Lenders scrutinize a borrower’s income, and a job is part of that stable income history.

Ron Suber, head of global institutional sales for prosper.com, a major online personal loan lending site, said when borrowers come to their site, current employment status and credit scores are main factors of the application. Suber said it helps their company decide if the person is eligible for a loan. It also impacts the rate and loan terms available.

Lenders want to ensure that borrowers can repay their debts. Without a job, it is unlikely that a borrower, who needs the money to begin with, will be able to a repay new debt in a timely manner.

Financial attorney and debt specialist, Leslie Tayne, said it is unlikely for an unemployed borrower to gain approval on a personal loan.

“If you don’t have a source of income at the time of the application for repaying the loan, it is unlikely that a creditor will take a risk of lending the money,” she told loans.org.

One type of personal loan available to unemployed borrowers is a secured loan. Secured personal loans are ensured by some form of collateral such as a work paycheck, a car titles, home equity, or a timeshare. Tayne said borrowers can also take out personal loans against a retirement or investment fund.

“I recommend against taking out loans against yourself, especially when you don’t have a definite source of income at that time for replenishing the money,” she said.

The value of the collateral impacts the size of the personal loan. A lender will not loan a large amount of money if the borrower can only provide an inexpensive piece of collateral. Reason begin, collateral is used as security for money, which a lender will repossess if the loan is unpaid. If that security is minimal, so will the amount of money a lender will lend.

Unsecured personal loans are an option, but they usually have more strict lending rules. Unsecured loans pose more of a threat to lenders, so without a job or steady source of income, borrowers will likely not qualify for an unsecured loan.

Lenders are willing to look past a typical form of employment, as long as a borrower receives a form of income, such as social security, unemployment, and disability. If a borrower has access to money from these sources each month, some lenders will be willing to lend to them. As long as the borrower receives steady income, there is a greater chance that the lender will be repaid.

If approved on any type of personal loan, borrowers should compare options from multiple lenders to determine the lowest interest rate available on the personal loan. If you are interested in applying for a personal loan, you can find an online application here.

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Written by Sara Routhier
Director of Outreach Sara Routhier

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman