How to Get a Loan Without a Job

By Bill Lyons | Published on May 17, 2023

Being unemployed can be stressful for the average person. Not having a job often means having little to no income, and you may require a loan to help you get through a difficult time and pay your bills. But can you get a loan without a job?

There are several loans with no job requirements. However, lenders typically like to see an alternate source of income to ensure you can repay the loan. Getting a personal loan with no job is much easier than other types of loans, such as home loans, because they come with less stringent requirements and lower loan amounts. But that doesn’t mean getting a loan without a job is easy.

To determine whether to give you a loan, banks and lenders identify how risky it is to lend to you. They won’t extend one to you if they determine that you can’t repay the loan. However, just because you don’t have a job doesn’t mean you don’t have income you can use to repay the loan. Keep reading to learn how to get a loan without a job.

Decide on the Loan Type You’re Applying for

As we’ve mentioned, you can get several types of loans without a job. However, whether you can repay the loan is more important than getting a loan. Even if a lender determines you can repay your debts, you should make the best decision based on your financial situation. Taking out a loan puts you into debt, which can be difficult to get out of without a job or traditional source of income.

Before you apply for a loan, deciding on the type of loan you want is crucial. There are several types of loans, each with advantages and disadvantages.

Secured loans

You can consider secured or unsecured loans if you’re looking for a personal loan with no job. Secured loans are secured by an asset, such as a house or car. Therefore, all home loans are secured by the house you purchase. These loans are typically best when you need a higher loan amount, so they’re not ideal for helping you pay your bills. However, you can get a secured credit card that uses a cash deposit as collateral and can help you build your credit score to get better terms on another type of loan.

Unsecured loans

Unsecured loans are the exact opposite of secured loans, and they’re another popular choice for personal loans with no job requirements. Also, unlike secured loans, unsecured loans don’t require collateral, making them a better option for individuals who need a loan to help them pay their bills in the short term. However, if you fail to pay your unsecured loan back on time, your lender can send your debt to a collection agency, resulting in a bad credit score.

DSCR loans

DSCR loans are designed for real estate investors only; they’re not for the average borrower. Instead, investors can use DSCR loans to purchase investment properties like short and long-term rentals. In addition, DSCR loans are much different from conventional and investment loans because instead of considering a borrower’s income, a lender determines the borrower’s debt service coverage ratio (DSCR), which is the property’s cash flow divided by the debt service, including the principal and interest on the loan.

These types of loans without job history and income requirements are reserved only for individuals purchasing investment properties, so they’re not ideal for personal loans or borrowers looking for a mortgage loan on a primary residence.

Cash-out refinance

A cash-out refinance is another type of loan you can use for anything from bills to debt consolidation. However, you can only get one if you own a home. A cash-out refinance replaces your current mortgage with a new one that has different terms. Many people use refinances to reduce their interest rates, add and remove borrowers, or alter their mortgage terms without changing the amount borrowed.

A cash-out refinance is different from a regular mortgage refinance loan. Instead of changing your mortgage terms without changing the amount borrowed, you replace your existing mortgage with a larger loan, and the difference between the loans is the amount of “cash out.”

HELOC

A home equity line of credit (HELOC) loan gives borrowers access to revolving credit for larger purchases or debt consolidation. With this type of loan, you borrow against the equity built up in your home from years of paying off your mortgage, and the house is used as collateral for the loan. When you repay your line of credit’s outstanding balance, the credit is replenished, making this option the most similar to a credit card.

Heloc loans are a good option for loans with no job requirements because the main requirement is having equity in your home. However, lenders will still look at credit score and history, job history, income, and debts to ensure you can afford to repay the loan.

Home equity loan

HELOC or home equity loans are good options for homeowners who have built enough equity in their homes. With a home equity loan (HELOANS), you’ll get the loan amount as a lump sum instead of having a balance that replenishes when you pay it off. Like a HELOC loan, a home equity loan requires you to have home equity to qualify. Home equity loans are sometimes called second mortgages because they operate like your first mortgage. You’ll typically have a set repayment term and make regular fixed payments over time.

Asset-based loans

There are several types of asset-based loans, including home, personal, and business loans. Traditional asset-based loans are secured by property owned by the borrower. For businesses, assets may include inventory, accounts receivable, and equipment. Asset-based loans work a little differently for mortgages. Instead of using assets as collateral, lenders like Griffin Funding convert your assets into income to determine your ability to repay the mortgage loan.

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Document All Sources of Income and Assets

Regardless of the type of loan you apply for, lenders must determine whether you can afford to repay it. To do this, they’ll consider your income and assets. While there are several loans you can get without a job, such as personal loans with no job requirements and mortgage loans designed for retirees, independent contractors, and individuals with high net worth, a lender will determine your eligibility based on your finances.

Lenders prefer to see reliable sources of income, but that doesn’t necessarily mean you need a job. An alternative source of income includes things like:

• Investment and rental income
• Retirement income
• Child support and alimony payments

In addition to income, lenders may convert your assets to income to determine if you have enough to cover your debts. Assets can include anything from your bank accounts to stocks, bonds and the cash value of your life insurance policies. If you’re unsure which types of documentation you need for a loan, you can discuss it with your lender to give you the best chance of being approved for the loan.

What If I Still Don’t Qualify?

Unfortunately, unemployment makes it harder to secure a loan regardless of the type of loan and amount. However, if you still don’t qualify with your existing income and assets, there are a few other ways to get a loan without a job, including the following:

Get a co-signer

A co-signer can drastically improve your chances of getting approved for a loan. Co-signers will not receive any part of the loan amount, but they take full responsibility if you fail to repay the loan. For example, if you take out a personal loan and don’t pay your bills, it becomes the direct responsibility of your co-signer.

Co-signers can help you get a loan without a job because they reduce your risk to lenders. In addition, a co-signer assures them that the loan will be repaid, even if it’s not by the borrower.

Increase your credit score

While income is an essential determining factor for loans, your credit score can drastically improve your chance of getting approved for a loan without a job. The higher your credit score, the less risky you are to lenders because it proves you’re a trustworthy borrower who pays their bills on time. You can increase your credit score by paying down any debts before applying for a loan or increasing your income to reduce your debt-to-income (DTI) ratio.

Applying for a Loan

Getting a loan without a job can be more difficult because you may not have a regular, consistent income stream. However, it’s not impossible. There are many types of loans, including home loans, you can get without a job. Remember, not having a job doesn’t mean you don’t have income. With a home loan, your assets are considered income, allowing lenders like us to help you qualify for a loan using alternative methods.

Wondering what your options are? Apply with Griffin Funding today to learn about mortgage options for individuals without jobs or regular streams of income. We can help you find the best loan for you based on your individual circumstances.

Bill Lyons

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.