Can I apply for a loan if I'm unemployed?
If you're unemployed and find yourself needing to a loan, it can be tricky. With no regular income it could be the time when you need to borrow money the most, however the lack of regular income could have an impact on your application being accepted.
This is not the case with all lenders though, as they could offer loans to people who are unemployed. They will complete affordability checks and if you can afford the scheduled repayments, you may be approved for one of their loans.
Which lenders accept you if you're unemployed?
Lenders who offer loans to those who are unemployed, normally specialise in loans for people on low income or with a bad credit history. They are alternatives to high street lenders, accepting loan applications from people in a range of financial situations.
The types of loans these lenders usually offer are short term loans and may require a guarantor. This involves borrowing a small amount of money and repaying it in under a year. Small cash loans for people who are unemployed, means you aren't tied down to a long-term financial commitment.
Unless you secure your loan against an asset or have a guarantor, you may not be able to borrow a large amount of money if you are unemployed.
How do loans for the unemployed work?
Getting a loan if you're unemployed works the same as any other type of loan, you apply directly to a lender or through a broker and they will consider your application against their eligibility requirements. Each lender may have different requirements, so before you apply with them, check to see if you are eligible. If your application is approved the lender will give you your money and collect the repayments on the days agreed upfront.
You may find that the loans you are eligible for have a higher interest rate then other forms of personal loans. This is because there's more risk to the lender of the money not getting repaid because of your lack of income.
Will I be accepted for a loan if I'm unemployed?
There is no guarantee your application for a loan will be approved. The better your financial situation and credit history is, the more likely you are to be accepted for a loan. Find out how you can improve your chances of being accepted for a loan here.
A responsible lender will always complete a credit and affordability check before making a lending decision. This means even if you can afford the repayments, your application may be refused for:
- A poor credit history
- Being declared bankrupt, applying for a sequestration, having a Debt Relief Order or an Individual Voluntary Agreement in the last 6 years
- Multiple credit applications
Can I get a loan with no income at all?
Loans are approved based on the borrower's ability to make the agreed repayments, so if you don't have any regular income your chances will be a lot lower. You may be eligible for a guarantor loan though. This is where a guarantor will sign for the loan alongside you and will be responsible for making any repayments that you can't.
If you're considering a loan but have no regular income you need to think about whether this is the best decision to take. The added payments each month, may cause an extra strain on your finances and could put you in a worse financial situation. We put together this money worries page to help if you're struggling with your finances.
Do benefits count as income?
Just because you're unemployed it doesn't necessarily mean you have no income available each month. If you receive benefits such as Universal Credit, some lenders may be willing to lend money to you as this is a constant income you receive each month. Most lenders will say what counts as income, when you are applying for your loan.
What loans can I get if I'm unemployed?
If you're unemployed and receiving benefits you may qualify for the following types of loan:
Doorstep loans: A doorstep loan, also known as a home credit loan works a little different to other forms of borrowing because it is personal and face to face. A loan agent comes to your home and issues your doorstep loan, and then returns to collect your repayments each week at an arranged time.
Secured loans: A secured loan allows you to borrow money that is tied to one your assets – like your home or your car. Secured loans usually have lower interest rates, as there's less risk to the lender if you are unable to repay the loan. However, as a last resort they can use the asset to repay the loan if you can't make the monthly repayments.
Guarantor loans: A guarantor loan is where another person, who is usually a friend or family member will co-sign for the loan alongside you. They will be responsible for making any repayments that you aren't able to. Your guarantor will also have to pass the same eligibility and credit checks that you have to.
Payday loans: A payday loan will give you that extra breathing room until the next time you are paid. You are then required to pay back the loan in full, with expensive late payment charges if you can't. Payday loans should only be considered as a last resort if you are unemployed.
Getting a Morses Club loan if you're unemployed
If you are currently out of work, or in between jobs you may still be able to apply for a loan from Morses club.
You can apply online in minutes and find out if you've been initially approved for one of our quick loans for people who are unemployed. One of our agents will arrange to discuss your application and explain the terms. They will also complete a credit check and affordability assessment.
As our loans our unsecured you don't need to own your own home or have a guarantor to sign for the loan alongside you.
Loans if your unemployed FAQs
A guarantor isn't necessarily needed for a loan if you're unemployed. Some lenders will accept your application based on you meeting their eligibility requirements and passing a credit and affordability check.
If you're switching jobs, it is possible to get a loan, but it may be harder. You should first consider if you need the money straight away, because waiting until you are back in work could give you access to more loans with lower interest rates. If you can't wait, then you may have to consider securing the money against your property or getting a guarantor loan.