If you’ve recently hit a financial rough patch, then a personal loan can help you get back on your feet. But if you’re unemployed and have bad credit, getting approved for a personal loan becomes substantially harder, though not impossible.

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To qualify for a personal loan, you need to understand what lenders are looking for and find a way to make your application more attractive. You also need to know what lenders are willing to work with borrowers in your situation.

Let’s look at how you can get a personal loan, even if you’re unemployed and have bad credit. I’ll also share some alternatives you can consider if a personal loan isn’t an option for you.

Can I apply for a personal loan if I’m unemployed?

If you’re unemployed, getting approved for a personal loan may feel like a long shot. But being employed in a part-time or full-time job isn’t a requirement for a personal loan.

Instead, lenders are looking to see that you have a regular income and can handle the monthly payments. So if you can provide proof of income, you’ll improve odds of approval.

For most people, their primary source of income is a job. But lenders will consider alternative sources of income which includes things like:

  • Social Security payments
  • Retirement
  • Disability payments
  • Your spouse or partner’s income
  • Alimony or child support

How Lenders Evaluate Loan Applications

Personal loans are riskier than other types of loans because they don’t require any sort of collateral. So if you default on the loan payments, your lender will take a financial loss on that loan.

That’s why lenders want to see that a borrower is able to repay the loan amount. So when you apply for any kind of loan, most lenders will focus on the following criteria:

  • Source of income: You don’t have to be employed to take out a personal loan, but you do need to have proof of income. This income can include disability payments, Social Security, and more.
  • Debt-to-income ratio: Lenders will calculate your debt-to-income ratio by dividing your total monthly debt payments by your monthly income. If your debt-to-income ratio is high, this can indicate you would have a hard time managing another monthly loan payment.
  • Credit history: And finally, lenders will consider your credit history. This history includes your credit score, payment history, and any recent charge-offs on your account.

4 Personal Loans to Consider for Bad Credit

If you’re unemployed and have bad credit, some lenders will still be willing to work with you. Listed below are four lending marketplaces you can consider.

1. MoneyMutual

MoneyMutual is a lending marketplace that specializes in working with borrowers that have bad credit. You could qualify for a loan up to $2,500 and receive the funds within 24 hours. But to be considered for a loan, you will need to show a monthly income of at least $800.

Read More: Check out our full review of MoneyMututal.

2. CashUSA

CashUSA offers short-term loans between $500 and $10,000, with an interest rate between 5.99% and 35.99%. The company doesn’t require you to submit your credit score, and your credit score won’t affect the terms and conditions of your loan. However, you will need to show you bring in at least $1,000 in monthly income. Funds will be directly deposited into your bank account.

Read More: Check out our full review of CashUSA.

3. BadCreditLoans.com

BadCreditLoans.com offers unsecured loans between $500 and $5,000, with an interest rate between 5.99% and 35.99%. The company is willing to work with unemployed borrowers, as long as you can demonstrate that you have proof of income.

Read More: Check out our full review of BadCreditLoans.com.

4. PersonalLoans.com

PersonalLoans.com offers loans between $500 and $35,000, with an APR range between 5.99% and 35.99%. You don’t need to be employed to apply, but you do need to show a monthly income of at least $2,000.

Read More: Check out our full review of PersonalLoans.com.

Alternatives to Taking Out a Personal Loan

After it’s all said and done, what if you’re unable to qualify for a personal loan? How can you access the cash you need in the meantime? Listed below are four alternatives you can consider.

  • Secured loan: Personal loans for unemployed people can be challenging to qualify for since they don’t require borrowers to put down any collateral. If this is a problem for you, then you can try applying for a secured loan. With secured loans, you use your home or another asset as collateral to guarantee the loan.
  • Credit card: If you already have a credit card, then you may not need a personal loan. Most credit cards will let you take out a cash advance. However, if you choose to go this route, you need to be careful. Credit cards come with high interest rates, so if you can carry a balance, this will cost you a lot of money in interest.
  • HELOC: If you have equity in your home, you can take out a home equity line of credit (HELOC). A HELOC is a revolving line of credit that you can borrow from as you need money. But this can be a risky move because if you default on the payments, you could end up losing your home.
  • Look for a cosigner: If you’re having a hard time qualifying for a personal loan, you can try applying with a creditworthy cosigner. Not only will this help you get past your low credit score, that person’s income will also be considered on the loan application.


If you’re unemployed and have bad credit, it’s still possible for you to apply for a personal loan. If you can show lenders that you are able to handle the monthly payments, they will be more willing to lend you the money you need.

However, just because it’s possible doesn’t mean it’s the right choice. If you’re already in a precarious financial position, it may not be a good idea to add another monthly payment into the mix.

You might consider alternatives ways to access the money you need. Taking out a cash advance or a HELOC may be better alternatives. That way, you can get a little financial breathing room until you’re able to get back on your feet.