Unemployment is a form of financial assistance the government offers to people who have lost their jobs at no fault of their own (although there are some unemployment exceptions for being fired). These benefits are state-specific, so the more minor regulations will depend on state laws and rules. However, in general, this system works pretty similar across the country.
Unemployment benefits are generally a portion of your income, which can leave some financial gaps you will have to figure out on your own. If you need some extra cash to supplement your unemployment income, you may be wondering whether you will be able to borrow a cash advance loan. Although it may feel strange filling out a loan application when unemployment becomes your primary source of income, it does happen and lenders see it often. The good news is that getting a loan while unemployed—including a cash advance—may be possible! Continue reading to learn more about your options.
So, How Do I Mention My Unemployment With a Loan or Credit Card Application?
When you apply for any kind of loan or credit card, you must fill out an application. With unemployment, you won’t have a traditional income. And so, when you see a question asking about your monthly income, you may be wondering what to include. Well, if you are unemployed, then you should list that as your income.
And although some lenders may see that and may not want to work with you, others may, and so it is worth a shot to at least inquire for pre-approval. Another thing to remember is that your income is only one factor in loan approval; there are several other things lenders will look at for eligibility.
Loan Options Including Cash Advances While Receiving Unemployment Benefits
Your lending options while on unemployment will depend mainly on your credit scores from all three credit bureaus, the amount of money you are receiving from unemployment, and your ability to repay the loan. Below you will find some loan varieties divided based on credit:
Bad Credit Options
When your credit score is lower than 669, it will be considered poor. You may still be eligible for funding, but your options may be limited to bad credit loans. Here are some examples of bad credit loan options you can look into:
A Payday Loan Cash Advance
Payday loans are short-term loans for bad credit borrowers. They offer a small number of funds (around a few hundred dollars) and are fast and convenient.
When researching a payday loan while on unemployment, you may come across options called “unemployment payday loans” or “emergency loans for the unemployed.” Essentially, payday loan organizations use these terms to state that they accept unemployment as income or to lead people to believe that payday loans are perfect for emergencies. Although payday loans can be flexible and fast, they come with extremely high-interest rates and usually lead to a cycle of debt. And so, it is best to avoid payday loan lenders if possible.
Bad Credit Personal Loan Cash Advance
Bad credit personal loans offer funding for individuals despite poor credit scores. Many people with bad credit may not think they can qualify for a personal loan; however, that is not always the case!
Although lenders like banks can be strict with income and credit score requirements, there are lenders online that are pretty flexible. A personal loan can be an outstanding emergency loan because they come with competitive interest rates and manageable repayment terms—even in the bad credit loan space.
Home Equity Loans
If you are a homeowner, you may be able to borrow from your home’s equity. The great thing about these loans is that you don’t need to have an excellent credit history, and there could be a significant loan amount. Keep in mind, though, that not all lenders may be willing to work with unemployed individuals.
Car Title Loans for Unemployed Individuals
Title loans are secured loans that use the borrower’s vehicle as collateral. With these loans, you will find indirect and direct lenders all over the country, allowing for flexibility with both credit and income requirements. However, like payday loans, car title loans come with extremely high-interest rates and can lead to a cycle of debt. Additionally, your car could be repossessed if you cannot pay back your loan.
Cash Advance Apps
There are multiple cash advance apps for unemployed people. Although these apps only provide an average funding amount between $50 to $200, with things like a job offer you may be able to get up to $5,000. Keep in mind that these apps usually have a short turnaround time, and you could be facing high fees if you cannot repay them on time.
Good Credit Options
When you have good credit, you’ll have more options to choose from. In addition, to more easily qualifying for the loans from above, you could get access to these other loan options:
You can use personal loans for all kinds of expenses, including supplementing your unemployment income. With a good credit score, you can get an excellent deal on one of these loans, and the lack of traditional income may not significantly impact loan approval. In most cases, lenders with personal loans will send funds straight to a bank account that you can cash.
Credit Card Cash Advances
Credit cards are a form of revolving credit that you can use multiple times before reaching your credit limit. Because most people have credit cards they already use, they don’t have to worry about applying for a new one. Keep in mind that when taking out cash from a credit card, the interest rates will be higher than your credit transactions. On top of that, there are often many fees involved with these cash transactions.
How Do I Increase My Chances for Cash Advance Loan Approval While Unemployed?
If you are unemployed and applying for in-person or online loans, you will want to put your best foot forward to increase your chances of approval. Here is what you can do:
Make Your Monthly Payments on Time Leading Up to Your Loan Application
Your payment history is one of the most important factors that lenders will look at when they do a hard credit check. And so, making your monthly payments on time can be extremely helpful in increasing your chances of approval. Especially leading up to your loan.
References can sometimes mean the difference between approval and not. Although some lenders may not have a section for references, you may want to talk to a loan agent and see if they can be included. Professional references who can speak about your reliability and character will be helpful.
Get a Cosigner or Co-Borrower
You can also increase your chances of approval by getting a cosigner or co-borrower. A cosigner is someone who will not be responsible for paying the loan unless the primary borrower does not. While a co-borrower shares the responsibility of repaying from the get-go. In both instances, their credit scores will be affected.
Show Your Ability to Repay a Loan as Much as Possible
Along with unemployment income, make sure you show your lender that you have the ability to make your monthly payments. The best way to do this is to avoid excessive loans before you apply for your new one. You can also inform a loan agent about your monthly bills to show them that you can make monthly minimum payments on a new loan.
How Long Does Unemployment Last?
Before you sign a loan agreement, it is essential to remember that unemployment benefits are temporary and will eventually stop. In most states, the average amount of time an individual will receive unemployment benefits (if they qualify) is 26 weeks at the state level. Federal benefits can kick in after those 26 weeks and provide a small extension.
Other Financial Assistance Programs You Can Look Into
Cash advance loans are not the only place you can turn to if you need financial assistance while receiving unemployment. The fact is that unemployment does not mean the same amount of income that you may have had while working a full-time job. Because of this, even with unemployment, you may need financial assistance due to hardship. Here are some government programs you can look into to help if you are struggling to make ends meet:
TANF (Temporary Assistance for Needy Families)
TANF helps low-income families take care of their necessary expenses. This program can help pay for food, housing, utility bills, and more. If you have children and are struggling to take care of your basic expenses due to unemployment, TANF can definitely help.
Programs From HUD (The United States Department of Housing and Urban Development)
HUD has several assistance programs for families and individuals. They can help you find low-cost housing—both rentals and home purchases. They can also help pay for things like utility bills.
Medicaid and Chip
Health insurance can be a considerable cost for individuals and families. Medicaid and CHIP are low-cost health insurance programs provided by the federal government.
Cash Programs/Assistance Programs for Veterans and Their Families
If you or a spouse served in the United States military, you may be able to use the different assistance programs available for veterans and their families. Veterans can look forward to all kinds of benefits as long as they apply.
You can also contact your local social services department to find out about more local assistance programs.
How Long Does Unemployment Last?