We may receive compensation when you click on links to products from our partners.
When lenders consider the eligibility factors for the borrowers while extending loans, a regular job is somewhere on the top of the list. Does it mean that you cannot get a loan if you are unemployed? Does not having a regular job limit your chances of getting a loan? Obviously, it may be difficult to convince the lender about your repayment capacity if you don’t have a regular paycheck coming into your account every month. But this does not mean that you absolutely cannot get a loan. Even the unemployed and those switching between jobs can get one, provided that they fulfill certain criteria. Moreover, applying for the right kind of loan also improves your chances and short term loans make a good option in this context. Let us understand how things may work for you.
Even the unemployed and those switching between jobs can get a loan, provided that they fulfill certain criteria.Tweet This
Short term loans for bad credit- Can you get an approval?
Now that it is clear that you can avail of a short term loan even without a regular job, the next question is whether you can get one even with a bad credit score. Though the situation sounds dicey, it is still possible to get a loan without a regular income and with a low credit score. The best approach would be to use Google to look for terms such as “short term loans bad credit” to find quick results. There are websites that can connect you with a network of lenders, which means that you have reasonably good chances of getting approval from one or more of them. The nature of the loan is short-term which lowers the risk factors for the lenders and they may get ready to extend a loan despite the odds.
Short term loans can be life-savers between jobs
If you are struggling to find a permanent job, managing your finances may not be easy. Even if you have an alternative source of income, you may still come across a cash crisis time and again. Short term loans can be true lifesavers in such dire circumstances because they have the potential to carry you through the rough patch. They give you the much-needed funds to meet your immediate needs and you get some time to pay them back. The best thing to do is to look for an installment loan that allows you to pay smaller amounts on a monthly basis until the entire loan is paid back. Since you know exactly what you have to pay on the due date, you can plan the payments accordingly. At the same time, being regular with your installments also helps you improve your credit score and trustworthiness in the long run.
Factors that lenders may consider while evaluating your application
Although some lenders may be willing to consider your application, you need to give them good reasons why they should actually approve it despite bad credit and no regular job. There are certain factors which they will probably evaluate closely, considering the circumstances. Here is a list of these factors:
Income: Even if you are between jobs right now, you may still have some sources income. For example, you may be getting good money from a side hustle, which is definitely a trust signal for the lender. The income of your spouse is also a factor that gives you better chances of securing a short term loan even for bad credit and without a regular job. Social security income and pension funds are some other alternate income streams that can help you secure a loan.
Assets and investments: Not having a regular job will not make much of a difference to your chances if you have a healthy asset and investment portfolio. In fact, they may even be ready to ignore a low credit score in such a situation. This is because your assets and investments make the lender worry less about the security of their money.
Credit history: Sometimes, a lender may be willing to extend the loan on the basis of the past credit history rather than the current low credit score. Having shown a responsible attitude towards the repayment of your debts in the past surely works in your favor.
What to expect while applying for a short term loan if you have bad credit?
Having a bad credit score and no regular job put you at a clear disadvantage when it comes to securing a loan. But this does not mean that you cannot get one in this tough situation. However, it is always good to be prepared and know what to expect while applying. Ideally, you should really consider taking out a loan only if you are sure about its repayment. The lenders will consider the same thing before approving your application. Here are some facts that you should bear in mind:
- The duration of the loan always matters when you are not in a good state in terms of a regular job and credit. This is the reason why you have good chances with short term loans.
- You may have to pay a marginally higher rate of interest on the loan because the risk factor for the lenders is higher.
- Discussing your option with the lender is a good idea because you may be able to work out a feasible plan that works for both parties.
- Short term loans may actually help you rebuild your credit score once you are able to find a regular job and repay subsequently.
Borrowing responsibly is critical
You will probably be relieved to know that you can secure a short term loan even with bad credit and without a regular job. But this does not mean that you should make borrowing a habit. Rather, limit loans only to a minimum and borrow only when you absolutely need to. Use the loan amount only for the purpose you have taken it in the first place. Also, make sure that you have a viable repayment plan in place, whether by getting a secure job or establishing a regular source of alternative income in the near future.