Document your income
Any income you receive can help you qualify for an unsecured loan. You will need to provide documentation such as a recent statement. Lenders may consider:
- Child support
- Pension or annuity
- Social Security
- Required minimum payments from retirement accounts
- Spouse’s income
Being able to document any income can mean the difference between getting an unsecured loan and a secured loan.
Document your assets
If you do not have enough income to qualify for a loan, you can instead apply for a secured loan based on your assets. Here are examples of assets that a lender might consider:
If you plan to use jewelry, art, or collectibles as collateral, the lender will require a professional appraisal and may require physical possession of the item until the loan is paid off.
Check with your bank
Credit unions and banks usually have secured loan options. Almost everyone will consider different sources of income for an unsecured loan.
Check online lenders
An online loan is like a loan at your local bank. They usually consider sources of income other than employment. Many popular online lenders only offer unsecured loans, but you will find some that specialize in secured loans.
Avoid Predatory Loans
Legal lenders provide loans using your car as collateral. Payday loans require huge fees. This is considered a predatory loan. They are very expensive and you may end up paying many times the loan amount.
In the event of a default on a secured loan, the lender can take your vehicle back (but the risk of collateral is true for any secured loan). For some payday loans, you cannot miss a payment because the lender will automatically withdraw money from your bank account on payday, even if you need it for other expenses.
Check rates and fees. Depending on your circumstances, not working can make you a riskier borrower. This can cause them to charge you higher rates and commissions for your loan installments.
What to do if you are not approved
If you are not approved, you can try to lower your loan amount or talk to your lender to see how you can qualify. Be careful when contacting multiple lenders, as each application can damage your credit score. Many lenders offer softness-based information that does not affect your score. Take advantage of this when you can.
If you have no income or property, it will be difficult for you to get a personal loan. In this case, you will need to reassess your needs and consider other strategies.
Besides asking for a loan from a family member or friend, you can also ask someone to be yours co-ruler… This means that you are asking this person to take responsibility and pay off your debt. You could inadvertently give someone who cares about a new financial problem if you can’t pay off the loan.