Unemployed? Bad Credit? 3 Types of Loans You May Qualify For

download (15)Everyone finds themselves short on cash once in a while. That is even more true when you’re unemployed. Often times you need extra cash just to pay for bills and necessities. Being in debt and having bad credit doesn’t help. This may make it seem impossible to get a loan.

Most lenders want you to have a steady income and good credit in order to be approved for a decent loan. These ‘decent’ loans are the best ones with the lowest interest rates. However, there are many lenders now who are offering loans for those who have no source of income or who have bad credit. While these loans may not offer you the best rates, they can help ease your financial troubles and build your credit so that better loans are a possibility in the future.

Traditional banks don’t often offer these types of loans. They don’t want to take the risk. The easiest way to find a lender willing to give you a chance is to look online. If you do a basic search for “unsecured loans” you should end up with plenty of results. You can also search for “bad credit loans” if your credit is less than good.

The types of loans you will find will vary a little. There may be different criteria that needs to be met, different interest rates and varying repayment options. Here are the 3 most common types of loan offers you will find that you’re eligible for:

1. Payday Loans

Loans like this are meant to be very short-term. Most lenders will require that the loan be paid back within 2 weeks. You have to have some sort of income for payday loans, even if it’s unemployment benefits or social security benefits.

Generally, the lender deposits a small amount of money (usually under $1000) into your checking account and it is due to be paid back the next time you get paid. The insurance on Payday loans is very high and the lenders do not report to the credit agencies, so it will not improve your credit even if it’s paid back in time. These loans are good for emergency situations where you need cash within a day or two.

2. Loans for Unemployed Borrowers

The amount of the loan that you will be eligible for will be directly related to your credit history. The better your credit, the higher the loan amount is and the lower the interest rates will be. These loans are the hardest to qualify for and are usually reserved for those with excellent credit. Repayment plans will vary, so you want to shop around.

3. No Credit Check Loans for the Unemployed

These loans are harder to qualify for than Payday loans and loans based on good credit. While the lenders do not check your credit, they do background checks instead. They look for a steady employment history and what kind of jobs you’ve done. This gives them some idea of whether they can count on you to obtain employment again and how much money you’d be able to make. Based on these results, you may qualify. While the rates may be high, they shouldn’t be as high as Payday loan rates and you will have longer to repay the loan.

While no one wants to be in debt, a loan can make life easier. You can pay your rent and bills and get the necessities you need. Then you just need to make one monthly payment to pay back the lender. If you make your payments in a timely fashion can also increase your credit score, so the next time you need to borrow, you will be eligible for higher loan amounts and better rates.