Are you in a bind and need a lump sum of money fast?
It can happen to the best of us. We’ve lost a job, our car doesn’t work, and we have the next mortgage and utility payments looming over our heads. Just because our income stops doesn’t mean our monthly costs do too.
Life can surprise you in unexpected and sometimes tragic ways. Hence the saying when it rains it pours. When life knocks you down, you might need a little extra help to get you back up again.
If you’re an unemployed worker who needs a loan, there are options for you despite your circumstances. Some lenders are more lenient than others. Payday loans are an available option, but you want to use caution.
If you’re considering a payday loan, then you’ve come to the right place. Here are our 9 tips to get payday loans for unemployed workers. Plus some useful advice to get you back on track!
What is a Payday Loan?
When you are in a bind and need money quickly, a payday loan might be the best option for you. These are loans that have a very high interest rate that you must pay back in a short amount of time.
You don’t necessarily have to have a job to receive a payday loan, but unemployment can make it a little more challenging. You will still need to prove that you have some source of income. However, payday loans tend to be easier to get because of the higher interest rates. Most require a post-dated check or your bank account information to guarantee payment as well.
Keep in mind that payday loans pack a big punch when it comes to debt. This is especially true if they aren’t paid back on time or you have to take out one loan to pay for another.
How Do I Get a Payday Loan?
If you’re unemployed and trying to get a payday loan, you have a few options. You can find a lender who is willing to offer a payday loan despite unemployment. They may require documentation that proves you are able to pay back the loan.
Still, there are some lenders that are willing to extend credit to you, even if you currently don’t have a source of income. It helps to have proof of unemployment benefits, disability, or Social Security. Income could also come in the form of assets, welfare, or investments that provide a regular deposit into your accounts.
1. When You Have an Emergency
Sometimes the unexpected happens and you need money quickly. Having the option of a payday loan is a great resource. You can get money deposited within one day so you can quickly get your life back on track.
You can’t always plan for large expenses, like if your car breaks down and you can’t afford to fix it or you need help paying off medical expenses.
In many cases, these loans must be paid back within 14 to 30 days. There may still be an option to extend this period, so it never hurts to ask if you can have more time. Just be sure you read the fine print and find out how that affects the amount you owe.
Usually, the cost of the fees is lower when you pay back the loan in a shorter amount of time. Fees will increase the longer you wait to pay back the loan.
2. If You Just Lost Your Job
You may have recently lost your job and need a loan to help keep up with expenses in the future. If you aren’t receiving unemployment benefits, you could still receive a payday loan or even a larger amount than what your current income allows.
This is because in some cases, the lender will only want last month’s paycheck. Since that would be your earnings at your last employer, that would allow you to get the loan. The important thing is that you are able to pay the loan back.
Don’t borrow more money than you are able to pay back within the required time. Otherwise, you could end up compiling debt quickly!
3. Be Honest About Your Income
If you are applying for a payday loan, then you will usually need to prove an income of $1,000 a month. Other lenders will require you to submit your bank account history and last month’s paycheck.
There are other ways to still receive a payday loan since lenders typically don’t require a credit check. When you apply for a loan online, you can in some cases receive approval instantly. Make sure to answer the questions honestly, which will accelerate the approval process.
4. A Lender You Can Trust
Believe it or not, you can receive your money in a matter of hours. You’ll want to find a reputable lender. There are plenty of scams online that will collect your personal information or even take money from you. Then they will be able to gain access to your accounts and steal from you.
Find reviews about the lender to make sure they are a legit business. Don’t just trust their own website for proof.
You can usually find out if they are a scam by doing an online search with the company name and “scam” in the search. See what experiences others have had. You can’t always trust what you find on the internet, so be sure to review multiple sources.
5. Apply Online
As mentioned before, applying online will allow you to receive approval and a loan much faster. You will also have the ability to research the company a bit before signing up.
It’s also easy to track when the money reaches your bank account when going online. If you are in a crisis situation, then speed is everything. You may have limited time to pay a bill or purchase services.
Going the online route will save you time and the hassle of traveling to a lender’s location, which could also mean additional waiting to get approved.
6. Get Approved
If you are unemployed, it goes without saying that it will be more difficult to get approved than someone with a steady income. If you are hoping to use your unemployment checks as collateral, be sure you find a lender who is willing to work around the schedule of when you receive those checks.
For those unemployed workers who don’t receive income, you might still be able to get approved for a loan. Some lenders will approve a loan if you use your assets as collateral, such as a car or home. Another option is to have someone with good credit co-sign your application.
7. Automatic Payments
If you are able to afford multiple payments, then there are some lenders that will allow you to set up an automatic withdrawal. This will help you to avoid forgetting to pay your loan back and prevent fees and penalties.
You can choose between paying one lump sum at the end of the loan or make multiple smaller payments over time.
Keep in mind that if your account doesn’t have enough money in it when the withdrawal happens, this could result in further penalties. You will have to pay extra fees to not only your lender but your bank as well.
8. Avoid the Risk
Being unemployed and taking out a payday loan is very risky because the penalties for not paying back a payday loan on time can add up quickly. On average unemployment benefits last about 26 weeks, but that exact amount varies by state.
Your unemployment running out doesn’t mean your payday loan disappears. Some people end up taking on second or third loans trying to pay back their first loan. Don’t get trapped in a hole of debt.
You might want to consider asking friends and family for a loan first. Even though it can be difficult to do, it might be the best option in the long run.
9. Find Alternative Options
A payday loan could be the best option for you if you are able to pay it back within the allotted time frame. But if you aren’t sure where the money will come from, then you might want to look into some of these alternative options first.
Personal loans or installment loans are a fixed payment option. These can help you avoid the high interest rates included in payday loans. You can also reach out to local government agencies, charities or non-profits who are willing to donate to those in need.
They are often willing to help with things like food and utilities to get you back on your feet.
Payday Loans for Unemployed Workers
Unfortunately, unexpected life events happen and we don’t always have a lot of options. If you’re unemployed and looking to get a payday loan, there are definitely lenders who are willing to offer the money. Be sure to take the necessary precautions when considering a payday loan.
Payday loans for unemployed workers might not be the best option for you. Have you ever had to take a loan? What advice do you have for unemployed people looking to loan some money?
Share your thoughts and experiences in the comments below!
Want to find more loan options? Check out our site to learn more!
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Are Guaranteed Payday Loans From a Direct Lender Worth It?