If someone finds themselves unemployed, they may also find themselves in need of a short-term loan. If a person does not already have an emergency savings in place, the loss or lack of a regular paycheck can cause bills to build up debts. Unemployed persons also may find themselves facing costs related to searching for a new job. Job search and placement services, transportation and sometimes new clothing are all costs that are often necessary when seeking to secure a new job. Becoming unemployed might also include loss of medical insurance, if the person was previously covered under their employer’s medical plan. This lapse in coverage may mean an increase in out-of-pocket healthcare costs. Whether funds are needed to cover medical expenses, costs related to searching for employment or simply to cover the cost of living between jobs, short-term loans, when used responsibly, can help bridge the lapse in income.

Unfortunately, obtaining a loan without a job can be difficult. Most lenders require proof of income as part of the qualification process for the loan. Without current employment or other source of regular income, few lenders are likely to approve an applicant for funding, but there are options available.

Credit Card Advances

Provided the borrower already has a credit card, he or she may be able to access cash quickly by taking out a cash advance against the card. This allows a borrower to access credit from his or her available balance to withdraw in cash. There is typically a limit on how much can be withdrawn for a credit card cash advance, and this type of loan usually includes a fee, as well as interest on the borrowed amount. Depending on the borrower’s total credit line, this option may only be able to provide up to a few hundred dollars in cash. If the borrower does not already have a credit card, he or she may find it difficult to get approved for a card without employment.

Installment Loans

An installment loan is loan granted to a borrower for a specific amount at a set interest rate, and is paid back in installments. The loan amounts can range from small to large, and can be a short or long period of time. While many lenders require proof of employment for approval, some lenders only require that some kind of regular income is coming into the household (such as alimony or disability benefits).

Pawn Loans

If a borrower has anything of value that can be used as collateral, a pawn loan may be an option. For this type of loan, the borrower takes the item to the pawn shop and the shop provides a loan to the borrower, using the item as collateral. The loan amount, plus any fees and interest, must be paid back by the end of the loan term for the borrower to reclaim their item. This option allows the borrower quick access to cash if they have an item of value that they are willing to part with temporarily. If the loan is not repaid, the item is forfeited to the pawn shop for resale – so it is very important for borrowers to ensure their ability to pay back their loan if they do not want to lose their property

Cosigned Loans

A cosigner guarantees the borrower’s debt in the event the borrower cannot repay it. If a loan applicant has inadequate income or low credit scores, lenders may allow the applicant to obtain a loan if they can get another person who may have more income or stronger credit scores to cosign on the loan. Getting a cosigner can allow a person to get approved for a loan that they would otherwise not have been able to obtain alone, but it can sometimes be difficult to find someone willing to guarantee another’s debt.

Potential borrowers should consider the various options available to them, and make sure they understand the loan terms and requirements. Regardless of the option chosen, it’s important to borrow responsibly. Unemployed borrowers should be especially careful in making the decision to take a loan, considering whether they will be able to repay the loan in accordance with repayment schedules outlined in their loan agreement.

The content on this site is for informational purposes only and is not professional financial advice. Blue Trust Loans does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation.

Hummingbird Funds, LLC is a sovereign enterprise, an economic development arm and instrumentality of, and wholly-owned and controlled by, the Lac Courte Oreilles Band of Lake Superior Chippewa Indians (the “Tribe”), a federally-recognized sovereign American Indian Tribe. This means that the Hummingbird Funds’ installment loan products are provided by a sovereign government and the proceeds of our business fund governmental services for Tribe citizens. This also means that Hummingbird Funds is not subject to suit or service of process. Rather, Hummingbird Funds is regulated by the Tribe. If you do business with Hummingbird Funds, your potential forums for dispute resolution will be limited to those available under Tribal law and your loan agreement. As more specifically set forth in Hummingbird Funds’ contracts, these forums include informal, but affordable and efficient Tribal dispute resolution, or individual arbitration before a neutral arbitrator. Otherwise, Hummingbird Funds is not subject to suit or service of process. Neither Hummingbird Funds nor the Tribe has waived its sovereign immunity in connection with any claims relative to use of this mobile site. If you are not comfortable doing business with a sovereign instrumentality that cannot be sued in court, you should discontinue use of this website.