How to get emergency cash loans for unemployed professionals

When you lose your job, your budget gets tight quickly. Your checking and savings account balances decrease with every bill you pay. You worry that you’ll soon run out of money to cover your expenses.

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Fortunately, there are some resources and financial products available that could help, including emergency cash loans for unemployed professionals. We’ll review your options below so you can make an informed decision about which route to take.

Government assistance programs

Before you take on debt to boost your monthly income or make ends meet, you should apply for financial assistance through government programs. 

• Unemployment benefits: Your first call should be to your state's unemployment office to file for unemployment benefits, which offers cash assistance for unemployed individuals. You'll receive a percentage of your prior earnings each week if eligible. Every state determines the maximum amount of money you can receive and the maximum length of time you can collect. Typically, you can receive unemployment benefits for up to 26 weeks (or until you find a job). There's no cash advance for unemployment benefits, but you'll receive set monthly payments.
• Supplemental Nutrition Assistance Program (SNAP): Previously known as 'food stamps,' the program helps low-income individuals and families get the food they need. SNAP is administered at the state level, so you'll need to contact the office in your state.
• Temporary Assistance for Needy Families (TANF): The program is designed to help you get back on your feet. If you meet income and residency requirements, are pregnant, have a child under age 18, or are under age 18 and serve as head of your household, you could qualify for financial, child care, and job preparation assistance. Like the other assistance programs, you must contact the TANF office where you live.

Pro Tip: The United Way can help you find local assistance programs in your area.

Personal loans

While no explicit unemployment loans exist, a personal loan may be a good option to get the cash you need. If approved, you’ll receive your funds in a lump sum, and may qualify for a long repayment period (up to seven years), a large loan amount, and a low annual percentage rate (APR).

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Qualifying for a personal loan with limited or no income can be tricky but not impossible. Some lenders will consider other types of income, like unemployment benefits, social security benefits, rental income, freelance income, alimony, child support, or spousal income (if your spouse is a co-applicant).

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The lender may also accept a signed job offer for a role to start in the near future. Plus, some financial institutions put more weight on your credit history, credit score, and debt-to-income (DTI) ratio when they evaluate your application. If you still can’t qualify independently, adding a co-signer with a good credit history and stable income may help. 

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Consider reputable lenders like Upstart, Avant, Lending Club, Best Egg, and Upgrade for emergency loans with no job. 

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Pros:

• Relatively low APR (usually fixed interest rate)
• Long repayment term options
• Potentially high borrowing limit

‍Cons:

• Harder to obtain
• You may have to pay a high origination fee
• You may need a co-signer to qualify

Payday loans for unemployed persons on benefits

A payday loan is a personal loan you repay with your next paycheck. Even though you don’t receive a regular paycheck while unemployed, some payday lenders may agree to give you a loan if you have sufficient, reliable income from another source, such as unemployment benefits.

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While a payday loan could help you cover your expenses in a pinch, it’s not the best financial product on the market. Payday loans often feature a triple-digit APR. Plus, if you can't pay it off on your next pay date, you’ll have to roll the balance into a new loan, incurring more fees and possibly entering into a perpetual (and expensive) debt cycle.

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Pros:

• Relatively easy to obtain – even with bad credit
• Get money fast

Cons:

• High fees
• Short repayment period
• You can only borrow a few hundred dollars

Alternatives to traditional loans

401(k) hardship withdrawal

If you have a 401(k) from a previous job, a hardship withdrawal is worth considering. It's not a loan; there is no repayment. Qualifying hardships include medical expenses, costs related to the purchase of a primary residence, tuition and educational fees, payments to prevent eviction or foreclosure on a primary residence, funeral expenses, and certain expenses for repairing damage to a primary residence. You can generally withdraw enough to cover the cost of the hardship. 

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Pros:

• No repayment
• Not based on income or credit

Cons:

• Need a qualifying hardship
• You risk a serious retirement shortfall if you can't make catch-up contributions

Home equity loan

If you own a house, your home equity could be a source of financial stability while you look for work. Your home equity is the difference between what your property is worth and the balance on your mortgage.

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One common way to tap into that equity is by taking out a home equity loan. Like other loans, some lenders may be willing to accept alternate forms of income. You’ll likely need at least 15% equity in your property and a good credit score to qualify (though there are home equity loans for borrowers with bad credit).

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If approved, you’ll receive your money in a lump sum and could have up to 30 years to pay it off. Your loan’s interest rate will be a bit higher than the current mortgage rate but still much lower than a credit card.

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The biggest potential pitfall of a home equity loan is that it’s secured by your property. If you default, your lender may foreclose.

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Pros:

• Long repayment term
• High borrowing limit
• Relatively low, fixed interest rate

Cons:

• Risk of losing your home if you default
• A lengthy application process that includes a home appraisal
• Closing costs (up to 5% of the loan amount)

Home equity investment

A home equity investment (HEI) can be a great way to access cash while unemployed. Unlike home equity loans or HELOCs, HEIs don't have income requirements. So, even with a low credit score and minimal income, you can still qualify with sufficient equity.

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Here's how it works: You receive a lump sum of cash in exchange for a percentage of your property's future appreciation. You don't pay interest, and you won't have to make monthly payments.

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Instead, you'll repay after the investment period ends (up to 30 years) or when you sell your home. Your repayment amount will vary based on your home's value at the time of repayment. For example, if your home appreciates significantly, you'll owe more than if your home depreciates.

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You can prequalify with no impact on your credit score and get an estimate.

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Pros:

• Credit score of 500 and sufficient equity to qualify - no income requirements
• No monthly payments
• You retain ownership of the property

Cons:

• Appraisal fees and closing costs
• Need a home in an eligible location
• You'll have to share your home's appreciation

HELOC

A home equity line of credit (HELOC) gives you a line of credit you can draw from instead of a lump sum. Similar to a credit card, you only have to repay what you use.

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During the draw period, generally 10 years, you can borrow from and repay your line of credit as needed. If money is tight, you can make interest-only payments.

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During the repayment phase, you can no longer borrow from your line of credit. You must make principal and interest payments until your balance is fully repaid.

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Your interest rate can be fixed or variable, depending on the loan you select. Like the home equity loan, your interest rate will be slightly higher than the current mortgage rate.

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Pros:

• Long repayment term
• High borrowing limit
• Relatively low interest rate

Cons:

• Risk of losing home if you default
• A lengthy application process that includes a home appraisal
• Closing costs (up to 5% of the loan amount)

Credit cards

A credit card can be a good way to cover your expenses while unemployed because you’ll only have to pay off what you charge (instead of the predefined lump sum of a personal loan). You can spend strategically, keeping your balance as low as possible.

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Plus, many credit cards let you take a cash advance if you need physical money in your wallet. However, the cash advance APR is likely higher than the purchase APR, and you may need to pay a fee for the transaction.‍

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If you don’t have a credit card, you may be able to get one. Like personal loan lenders, credit card issuers might accept alternate forms of income.

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Pros:

• Only repay what you use
• APR is lower than a payday loan
• It may give you access to cash

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Cons:

• APR may be higher than a personal loan
• Variable interest rate
• Easy to overspend (which could increase your utilization rate and damage your credit score)

Emergency cash loans for unemployed people with bad credit

Whether you’re employed or not, a bad credit score can make it challenging (or impossible) to qualify for a loan or line of credit. Plus, if your DTI ratio is high (meaning you owe a lot in relation to your income), lenders may think you can’t afford to repay a new debt.

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Fortunately, there are steps you can take to build your credit score. For example, if you pay your bills promptly for years, your score should increase. You should also check your credit report and dispute any errors you find. If the credit bureaus remove the erroneous negative information from your report, your score could go up.

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In the meantime, if you need an emergency cash loan now, consider asking family or friends to lend you some money. While it’s not ideal to owe money to people you love, you’ll likely get a better interest rate and loan terms from them than through a bank.

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You could also ask a creditworthy friend or family member to co-sign on your loan. Remember, if you get the loan and default on it, your co-signer is legally responsible for the debt.

Final thoughts

When you’re unemployed, it may feel like you don’t have any borrowing options. Fortunately, that’s not true. Some lenders are willing to work with you if you have good credit (or a co-signer) and an alternative source of income.

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Plus, you can always partner with a company like Point to access your home equity through a home equity investment. If you’re ready to explore this option, you can contact us or quickly and easily see how much money you may be able to get.