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Yes, you can apply for a loan if you are unemployed. However, being accepted for the loan is a different issue altogether. While a lack of regular income may seem like a fitting time to borrow money, it may actually negatively impact your loan application.

Some loan lenders may actually offer loans to the unemployed, asking them to complete affordability checks which can in turn then result in a loan approval.

Which Lenders will Accept You if You are Unemployed?


There are a number of lenders who will offer loans to the unemployed, those on low incomes or with a poor credit history. They differ from typical high street lenders in that they will accept loan applications from people in a range of financial situations.

Typically, it is short-term loan lenders that will accept you if you are unemployed, and they may require a guarantor. If you are unemployed, you may not be able to borrow a large loan without a guarantor.


How Can I Apply for a Loan if I am Unemployed?


Applying for a loan if you are unemployed is a relatively similar process to that of someone in employment. You will need to apply directly to a lender or through a broker, and they will then consider your application against their eligibility requirements. Prior to putting in an application, it is worth having a read of their requirements to check whether you would be eligible.

If the loan application is approved, your lender or broker will provide the funds and arrange to collect the repayments on the agreed dates.

Often, if you are unemployed, you may find that you will be offered a loan but with a higher interest rate on the repayments. This is because you may appear as a risk to the lender due to your lack of regular income payments.

Will I be Accepted for a Loan if I am Unemployed?


There is no guarantee that your application for a loan will be approved if you are unemployed. If you have a strong credit history then this will increase your chances of being accepted.

Lenders will require you to complete both a credit and affordability check before they make their final decision. If you are unemployed and also have a poor credit history, have previously been declared bankrupt or have applied for multiple lines of credit then it is likely that you will be accepted for a loan.


Can I Apply for a Loan if I am Unemployed?

What Loans Can I Get if I am Unemployed?


If you are unemployed and also receive benefits then you may qualify for the following types of loans:


  • Doorstep Loans

A doorstep loan, also known as a home credit loan, is personal and operates face-to-face. A loan agent will make regular visits to your home, as well as visit to collect your repayments each week at an agreed time.


  • Secured Loans

A secured loan allows you to borrow money with repayments tied to an asset – such as your property or car. Typically, secured loans have lower interest rates as the risks to the lender if you are unable to repay the loan are minimal.

As such, the lender can use your assets as a last resort if you cannot afford the monthly repayments.


  • Guarantor Loans

A guarantor loan is where someone else, typically a friend or a family member, will co-sign your loan. This means that they are also essentially responsible for making any repayments if you are unable to.

In these instances, your guarantor will also be required to pass the same eligibility and credit checks, and it will usually help if they are employed.

Do I Need a Guarantor for a Loan if I am Unemployed?


No, you do not necessarily need a guarantor for a loan if you are unemployed. Some lenders will still accept your loan application if you meet their eligibility criteria, as well as pass their credit and affordability checks.

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Ilana Koffman

Read expert articles from Ilana who has lots of experience in the financial world. Learn from her useful guides on loans, money, savings and lots more.