It's possible to qualify for a loan when you're unemployed, but you'll need solid credit and some other source of income.
Whatever the reasons for your unemployment status are, lenders will consider extending you a loan as long as you can persuade them you can make regular payments on time.
More specifically, lenders will want to see:
- Strong credit history: A pattern of timely payments on your credit report, with few to no late or missed payments (especially in recent years), can reassure lenders that you manage debt responsibly.
- Credit score: Lenders typically set minimum credit score requirements for different types of loans, and they reserve their best loan offers - the ones with the lowest interest rates and fees - for borrowers with good credit scores.
- Regular income: Lenders need to know you'll be able to make your loan payments each month. It doesn't have to be from a paycheck, but you must have one or more sources of income that are reliable and sufficient enough to cover your loan payments.
What to Consider Before Taking Out a Loan While Unemployed
Before taking out any loan, regardless of your employment status, it's important to be honest with yourself about your ability to fully repay the loan as agreed.
Missing just one payment can do significant damage to your credit, and defaulting altogether will put a major blot on your credit history.
Be realistic about your ability to cover the monthly payments for the life of the loan. If there's any doubt, consider skipping the loan or borrowing a lower amount you can comfortably repay.
Depending on the nature and volume of your income sources, lenders may consider altering their loan offer in several ways, including:
- Lowering the loan amounts you're eligible for.
- Charging higher interest rates and possible origination fees to offset costs of pursuing payment if you default on the loan.
Where to Get a Personal Loan
A personal loan, which doesn't require you to have guarantor(s) or security such as title deed or a car logbook is the type of loan best suited for getting ready cash quickly. Personal loans are for instance available from many, if not all, digital lenders.
But a great place to shop for such loans, unemployed or not, is definitely the CreditHela loan app whose loan limit is among the highest in Kenya currently. The app offers loan amounts ranging between Sh1,500 and Sh80,000 at very affordable interest rates.
You can click here to download the CreditHela app from Google Playstore but while there, be sure to read and understand the loan terms and conditions before applying to ensure you get everything clearly.