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How to Get a Personal Loan Without a Job

Kenneth Boyd Updated: January 31, 2024 • 5 min read
woman holding a personal loan document in her hand

Key Points:

  • Personal loans have a fixed interest rate and a fixed schedule of monthly payments.

  • The amount borrowed, the loan term, and the interest rate impact the loan’s monthly payment amount.

  • Lenders may consider other sources of income when approving a loan.

Consumers take out personal loans to meet a variety of financial needs, and the loan terms determine your monthly payments and interest costs. Some consumers receive loan approval for a personal loan without income from a full-time job.

This article defines personal loans and how monthly payments and interest costs are determined. You learn about strategies to apply for a personal loan without traditional employment.

Can You Get a Personal Loan Without a Job?

Yes, getting a personal loan without a traditional job is possible, but it can be more challenging. Lenders typically look for evidence that you can repay the loan, steady income is a significant part of that assessment.

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Monthly Payments and Interest Costs

When you borrow over a longer period, the loan repayment is spread over more months. As a result, your monthly payment will be lower. However, borrowers pay more total interest costs on longer-term loans. You’ll pay more interest on a five-year loan vs. a three-year loan, and a long-term personal loan will be the most costly.

A short-term loan requires you to repay more of the principal amount each month, meaning your monthly payments will be higher. However, the total interest cost is lower on a short-term loan.

Understanding Your Credit Score

Your credit score is the biggest factor determining the interest rate charged on a personal loan. Consumers with low credit scores may struggle to secure a loan.

The most common credit scoring provider is the Fair Isaac Corporation, or FICO score. When you apply for a loan, lenders typically use your FICO score and other details for credit score lending. Lenders assess credit risk, which is the risk that a borrower won’t repay the loan.

FICO evaluates five areas to determine a borrower’s loan eligibility:

  • Payment history: What is the total history of loan applications, debt repayments, or late payments? That factor must be considered if a borrower made late payments five years ago but has paid on time since then.
  • Current level of indebtedness: How much total debt does the borrower have outstanding? How many different loans?
  • Types of credit used: Debts may include a home mortgage, vehicle loans, personal loans, or credit card debt.
  • Length of credit history: A 10-year history of consistently paying debts on time indicates financial stability.
  • New credit accounts: Has the borrower taken out other loans recently? If so, it may be an indication that the individual is carrying too much debt, or is in financial trouble.

FICO scores range from 300 to a high of 850, and scores of 670 or higher are considered good scores. If your score is below 670, you have a low credit score. 

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Other Sources of Income 

Unemployment is not the only factor a lender will consider on a loan application. Remember that the lender’s goal is to determine if you have sufficient income to make personal loan payments and meet all of your other obligations.

You may be approved for a loan if you have income sources other than earnings from a traditional job. A higher total income puts you in a better position to repay a loan.

Here are some alternative income sources that a lender may consider as part of your loan application:

  • Child support, alimony payments
  • Spouse’s income
  • Pension: A pension may pay a specific amount of income to a retiree each month, or the payments may vary, based on the assets invested and the investment performance.
  • Annuity: An annuity is a series of payments that may be a fixed or variable payment each month. Annuities are often related to an insurance contract.
  • Disability or Social Security benefit payments
  • Dividend or interest income on investments
  • Retirement account distributions: IRS rules require investors to take required minimum distributions from retirement plans when the individual reaches a specific age. 

Over time, an individual’s income may change substantially. Someone who is struggling financially while in medical school or law school will make a much higher income once they are out of school.

How to Apply for a Personal Loan 

If you want to apply for a personal loan, check if you have a good credit score. Next, start to compare personal loan options from lenders. Your credit score will help the lender determine the interest rate you’re charged on a personal loan.

1. Understanding a Credit Check

When a lender checks your credit score, the company is performing a credit check. The check is done to assess the risk that the debt will not be repaid. The lender reviews existing and past debts, and whether or not the debts were repaid on time. Lenders also consider the types of debts a borrower repays (home mortgage, car loan, credit card debt).

Equifax, Experian, and TransUnion are the three large credit bureaus that track a borrower’s credit history. Lenders send financial details to the credit bureaus when you borrow money, make payments, or miss a payment.

There are two types of credit checks (or credit pulls), and you need to know the difference between hard and soft credit checks.

  • A hard credit check, or hard inquiry, is a credit check that may cause your credit score to decline.
  • A soft credit check does not impact your credit score; you may see this promoted by credit card companies and other lenders when they advertise.

2. Get Prequalified for a Loan

Getting prequalified for a loan allows a borrower to shop for the most attractive loan without damaging the borrower’s credit score. When prequalified, the lender will provide the loan terms, including the amount, interest rate, and required monthly payments. You’ll also know about any other fees and costs related to the loan. 

A prequalified loan is not a guarantee of approval, and you’ll still need to apply for the loan. However, the process allows the borrower to determine the loan terms without hurting his or her credit score.

3. Applying for a Loan

If you’re been prequalified for a loan, the lender will already have much of the data needed to approve a formal loan. Here are some of the items needed to complete a loan application:

  • The loan amount, and the purpose of the loan
  • Credit score range
  • Annual income
  • Monthly home mortgage cost or rental payment

Have this information pulled together before you start researching personal loans. The sooner you can complete a loan application, the faster you’ll learn about loan approval.

The Bottom Line

It may be possible to secure a personal loan without traditional employment. Research companies or financial institutions that provide personal loans before you apply. Document each source of income you have, and include that information with each loan application. When you do your homework, you can make an informed financial decision.



What is a typical loan term length for a personal loan?

Depending on your lender, personal loan terms are from one to seven years.

What factors impact the dollar amount of my monthly loan payment?

The loan amount, the loan term, and the interest rate help determine your monthly loan payment.

If I don’t have income from a traditional job, will a lender consider other sources of income in my loan application?

A lender may consider other sources of income that a borrower can use to make monthly payments on a personal loan.

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Written by Kenneth Boyd

Kenneth Boyd is a four-time Dummies book author, including the book Cost Accounting for Dummies. Ken writes, blogs, and provides video content on business topics.