I'm Unemployed and Need a Loan

[Mar 13, 2010.]

 

Being unemployed for a long period of time can leave your financially devastated. If you've run through your savings, you may wonder if there's any way to get a loan to help pay bills. Unless you find a generous friend or family member willing to lend money, you may have a tough time finding a loan.

High Interest Personal Loans

Most banks are not going to give you a personal loan without the income to repay it. Banks have even gotten tough on borrowers who are still employed and have good credit. As an unemployed person, you're going to be looking at high-interest loans from alternative sources.

No Credit Check Loans

Believe it or not you probably won't have much luck getting a fast loan from a payday lender either. That's because these no credit check loans are made against your next paycheck. When you don't have a paycheck coming in there's nothing to guarantee that the loan is going to be paid back.

Although you may have seen ads or Web sites claiming that you can get an unemployment personal loan, don't hold your breath. Unless you have some type of asset to put up as collateral, it's unlikely you are going to be approved for such a loan.

Tapping Home Equity

So  where can you go to get a personal loan if you don't have a job? If you have an existing home equity line of credit (HELOC), you could draw on it to help with expenses. But relying on a HELOC over a long period of time is only going to burden you with a large level of debt. You also are going to have to come up with the money to make the monthly payments on the account.

Peer-to-Peer Loan Sites

You could try to get a personal loan through a social lending Web site. These services allow multiple individuals to fund loan requests through a bidding process. Depending on your credit score, you may find people willing to risk lending you money.

Retirement Account Loans

As a last resort, you could always borrow money from your retirement account. Doing this is generally a no-no because it messes with the long-term growth of your retirement savings. However, if you have done everything possible to slash your expenses and downgrade your lifestyle but still are having trouble keeping a roof over your head and food on the table, borrowing from a retirement account may help you get through the storm.

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.