Being unemployed does not rule out all possibilities of >obtaining a personal loan. It is still possible to get a loan if you can think of a way to provide income proof. As long as you can afford paying back, you should go ahead to apply for the loan. The following are 3 tips on how you can get a loan if you are unemployed.
1. Alternate Income
If you are unemployed, you may be living on income that you receive from other sources. As long as you have documents to prove those income, the bank will still consider to approve the loan. The lender will review these document to find out how long you have been and will still be receiving support from the alternate income sources.
The lender will also want to look at the total cash flow you are paying towards your debt every month. You need to make sure that the debt is no more than 43% of the gross monthly income. Examples of alternate income include social security income, pension fund, disability income, alimony payment, investment income, dividend income, retirement income, child support, and government annuity.
2. Get a Cosigner
You can apply a loan with the help of cosigner. When you apply with a cosigner, the cosigner’s credit score and income will be used to approve of the loan. The idea is that the cosigner will be responsible of paying the loan if you are unable to make repayment. You must keep in mind that neglecting to make payment will leave a negative impact on both your credit score and the cosigner’s credit score.
There are very few banks that offer cosigner options. Banks like Wells Fargo and Citibank do offer customers with cosigner options. Online lenders and credit unions are the best sources for unsecured personal loans that offer cosigner options. Examples of online personal loans lenders that offer cosigner options are LoanMoz, Light Stream, Freedom Plus, Backed Personal Loans, Lending Club and OneMain Financial.
3. Get a Secured Loan
You shouldn’t be disappointed if you have been rejected time after time for an unsecured loan. You can still apply for a secured personal loan by using your property as a security. When taking out a secured loan, the lender will consider how much balance you still have outstanding on the mortgage.
The lower the loan to mortgage value, the lower the interest rate and higher the loan amount you will get approved. This is because the house now has a larger equity portion. Secured loan can be dangerous because the bank can send a charging order when you are unable to make repayment. The bank will auction your property to compensate for the cost of the loan which you fail to repay.