Emergency Loans for the Unemployed

If you are facing limited cash flow in 2020, you are in the company of many. The pandemic has left millions of Americans unemployed, which makes budgets tighter than usual. More than 40% of Americans say they’d have a hard time covering an unexpected expense of just $250. But there is a silver lining. If you need access to affordable financing, we used our SimpleScore methodology to find three of the best emergency unemployment loans of 2020.

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    In this article

      The 3 best emergency loans for the unemployed 2020

      Best emergency loans for unemployed at a glance 

      LenderAPRTermsLoan Amount
      LendUp178%–1251% for single payment loans; up to 256.34% for multi-payment loans7 to 31 days for single payment loans; up to 5 months for multi-payment loans$100 to $500 for single payment loans;up to $1,000 for multi-payment loans
      BadCreditLoans.com5.99%–35.99%Varies depending on lender, average 12 months$500 to $10,000
      PersonalLoans.com5.99% to 35.99%90 days to 72 months$500 to $35,000

      *Rates accurate as of September 10, 2020

      Best for rebuilding your finances – Lendup

      The LendUp ladder can help you earn better rates and terms while strengthening your financial knowledge.

      APR Range
      Varies
      Loan Amount
      $100.00–$255.00
      Term
      Varies
      SimpleScore
      1.5 / 5.0
      close
      SimpleScore Lendup 1.5
      APR N/A
      Loan Size 1
      Customer Satisfaction 1
      Support 1
      Fees 3

      LendUp lets you apply for larger loans at lower rates over time, but you’ll pay a premium when getting started. 

      LendUp has two different types of loans — single payment, which is similar to a payday loan, and multi-payment. Its single payment loans range from $100 to $500 and have extremely high rates of up to 1,251% APR. Its multi-payment loans allow you to borrow more money at a lower rate, but they are only available to returning borrowers who have climbed the LendUp Ladder. To climb the ladder, you have to make your payments on time and take LendUp’s financial education courses. On the positive side, LendUp considers borrowers with bad credit and has fast funding times as soon as the next business day.

      Best for mid-size bad credit loans – BadCreditLoans.com

      BadCreditLoans.com offers loans up to $10,000 with longer repayment terms, great for larger emergency expenses.

      APR Range
      5.99%–35.99%
      Loan Amount
      $500–$5K
      Term
      3–36 months
      SimpleScore
      3 / 5.0
      close
      SimpleScore BadCreditLoans.com 3
      Rates 3
      Loan Size 1
      Customer Satisfaction N/A
      Support 3
      Fees 5

      Lenders on BadCreditLoans.com offer loans up to $10,000 at reasonable rates, which makes the website a good option for borrowers with bad credit. 

      BadCreditLoans.com is a loan aggregator that connects borrowers with bad credit to lenders willing to work with them. You don’t need perfect credit or a job to qualify for loans through the site — lenders will consider alternative sources of income like disability payments, Social Security benefits and even freelance income. Lenders on BadCreditLoans.com also have fast funding times, so you can get your money as soon as the next business day.

      Best for large bad credit loans – PersonalLoans.com

      PersonalLoans.com is like an oasis in the desert for borrowers in a cash flow drought — it has reasonable rates, large loan amounts and longer repayment terms. 

      APR Range
      5.99%–35.99%
      Loan Amount
      $500–$35K
      Term
      90 days–72 months
      SimpleScore
      4 / 5.0
      close
      SimpleScore PersonalLoans.com 4
      Rates 2
      Loan Size 5
      Terms 5
      Support 3
      Fees 5

      Need an even larger loan? You may be able to get it through PersonalLoans.com.

      PersonalLoans.com is another loan platform that matches you with lenders based on your financial profile. Lenders on the site usually require you to have a credit score of at least 580 to get a personal loan. You’ll also need a source of income, but it doesn’t have to come from a job. Social Security benefits, disability income or self-employment income may be enough to qualify you for a loan.

      Check Your Personal Loan Rates

      Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

      Get Started

      with our trusted partners at Bankrate.com

      [ Read: Best Bad Credit Personal Loans in 2020 ]

      What is an emergency loan?

      Emergency loans are a form of personal loan that can get you through a tough financial situation like losing your job or getting stuck with a big medical bill. A lender loans a borrower money and then expects repayment of the entire amount, plus interest and fees. They usually have fast application processes and funding times to get you the money you need quickly. Personal loans are the best, cheapest emergency loan option, but you can also take out payday, title or pawn shop loans in a pinch. 

      How emergency loans work

      Most emergency loans are installment loans, meaning you borrow a lump sum and repay it over a period of a few weeks or months. Emergency loans can range from $100 all the way up to $35,000 or more. But if you have a low credit score or limited income, you may not be able to borrow as much as someone with a higher score and level of income. You may also get charged a high interest rate if lenders see you as a risk.

      [ Related: How to Get a Loan With Bad Credit ]

      Still, if you can’t get a loan from family and friends, or don’t want to, emergency loans may be a good option. They have fast funding times and flexible eligibility requirements, allowing you to qualify even if you’re unemployed.

      Fast funding

      Many personal loans have quick application processes, allowing you to apply online in minutes. Once you send in your financial details, you’ll usually receive your funds in one to seven business days. Typically, fast funding for personal loans means either same-day funding or next-day funding. If you need an emergency loan, look for lenders that offer same-day or next-day funding.

      Flexible eligibility

      Lenders understand that borrowers who need money for unexpected expenses don’t always have perfect finances. That’s why many emergency loans have flexible eligibility requirements. 

      Even if you’re on unemployment or have bad credit, you may be able to qualify for a personal loan through a platform like PersonalLoans.com. Lenders on the site consider borrowers with alternative sources of income and credit scores as low as 580.  

      [ More: What Are No-Credit-Check Loans? ]

      Title loans are also an option. They’re short-term loans that allow you to use your vehicle as collateral. However, if you go into default, your lender may repossess your car, putting you in a worse situation.

      Payday loans are also available to borrowers with bad credit or no income. But their interest rates are usually much higher than other types of emergency loans, so you are better off avoiding them. 

      Emergency loan alternatives

      Credit cards 

      If you only qualify for high-interest personal loans or payday loans, using a credit card could be significantly cheaper. The average credit card has an interest rate of just 14.52%, while payday loans can have rates of 400% or higher. 

      If you don’t already have a credit card, you may even be able to get approved while you’re unemployed. Thanks to the Credit Card Act of 2009, you can include your household income on your application. So if your partner is still employed and you have good credit, you may be able to qualify for a card that has a 0% intro APR and avoid paying interest altogether. 

      Some credit card companies offer instant approval and allow you to start using your card for online purchases right away. Once you receive your card, you’ll also be able to get cash advances at ATMs. Cash advances usually have higher interest rates than purchases, so keep that in mind.

      Payday alternative loan

      Depending on your credit score and income, you may be able to get a payday alternative loan. These are small-dollar loans offered by credit unions that have longer terms and lower interest rates than payday loans. You can usually borrow between $200 and $1,000 and repay it over one to six months. 

      However, payday alternative loans may not be the best option if you need cash right away. Credit unions typically require you to be a member for at least one month before you can take out a loan.

      What to consider before taking out an emergency loan while unemployed 

      Can you afford to pay back the loan? 

      Many loans for the unemployed have high interest rates and short repayment periods of just a few weeks or months. This means you could have to pay back a lot more money than you originally borrowed within a short timeframe. 

      [ Read: Best Personal Loans for 2020 ]

      Before you take out emergency loans with no job, make sure you understand the costs and have a plan for paying your lender back. Otherwise, you could fall behind on payments and get charged costly late fees or a high penalty interest rate, putting you further into debt and hurting your credit score. 

      Are there any alternatives? 

      Before you take on debt, maybe you can pick up a side gig or sell some unwanted belongings. If you have a car, you could become a driver for a rideshare or food delivery service. You might even be able to qualify for an emergency relief grant for laid-off workers depending on your situation. That way, you’ll be able to borrow less money and save on interest. 

      [ Read more: The Best Payday Loan Alternatives ]

      Can you negotiate with your creditors? 

      If you’re taking out a loan to pay your debt and regular living expenses, you may be able to get assistance instead of taking out a loan. Many creditors are offering debt relief to customers facing financial hardship due to the pandemic. Citizens Bank, for example, is waiving late fees and offering payment assistance for up to 90 days. Even if your lender doesn’t have a specific debt relief policy, you may be able to explain your situation and get on a payment plan that works for you.

      Organizations like the National Low Income Housing Coalition are also offering rental assistance, and the government is expanding its food assistance programs for children and adults.

      Emergency loans during COVID-19

      In response to the pandemic, some lenders are offering low-interest emergency cash loans for unemployed workers. 

      The Capital Good Fund, for example, is providing crisis relief loans ranging from $300 to $1,500. It offers loans with a low APR of just 5% and terms as long as 15 months. The loans are also deferred for 90 days, giving borrowers a chance to financially recover before payments begin. 

      [ Read: Where to Find Financial Relief During the COVID-19 Pandemic ]

      How to choose the best emergency loan for you

      1. Check your credit. Some lenders have strict credit score requirements for personal loans, while others will consider borrowers with bad credit. Checking your credit score will help you narrow down your options and find a loan that fits your financial profile. 
      2. Determine how much you need to borrow. Some companies like LendUp only offer small-dollar loans, which won’t work for you if you need several thousand dollars. Figuring out how much money you want to borrow before you start applying for loans will help you choose the right lender.
      3. Think about how much time you need to pay it back. If you only need a couple of hundred dollars to hold you over until your new job starts, a short-term personal loan may work for you. But if you’re going through an extended period of unemployment, a loan with a longer-term and lower monthly payments may be more manageable. 
      4. Get pre-qualified. Getting pre-qualified with multiple lenders will allow you to compare rates and fees and find the best deal. 

      Emergency loans FAQs

      Some lenders may be willing to consider alternative sources of income if you don’t have a regular salary, especially in these times. Unemployment benefits, disability payments, Social Security income or rental income may be enough to qualify you for emergency loans with no job. A job offer or signed freelance contract can also serve as proof of income. 

      If you don’t have any sources of income, you may still be able to qualify for a loan by putting up assets like your house or car as collateral. Jointly applying with someone who has a job, like a spouse or family member, could also help you get approved.

      Last updated September 11, 2020 – Updated SimpleScore data and editorial guide.

      We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

      Methodology

      SimpleScore

      The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

      For every review, our editorial team:

      • Identifies five measurable aspects to compare across each brand
      • Determines the rating criteria for each aspect score
      • Averages the five aspect scores to produce a single SimpleScore

      Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.

      Why do some brands have different SimpleScores on different pages?

      To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

      However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).

      Questions about our methodology?

      Email Hayley Armstrong at hayley@thesimpledollar.com.

      Rates

      We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.

      Loan Size

      We awarded higher scores to lenders with more generous loan sizes.

      Customer Satisfaction

      We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

      Support

      We awarded higher scores to lenders with the most channels for customer support.

      Fees

      We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.

      Jessica Walrack

      Contributing Writer

      Jessica Walrack is a personal finance writer at SuperMoney, Interest.com, The Simple Dollar, and PersonalLoans.org. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and somewhat fun.

      Reviewed by

      • Courtney Mihocik
        Courtney Mihocik
        Finance Editor

        Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.