Unemployment can lead to a distressing financial situation. Even if you carefully built an emergency fund for situations like this, eventually, the funds will run out.
If you don’t have a new job lined up and cannot keep up with your expenses, then turning to a personal loan while unemployed could be an option for you.
Although not all unemployed individuals will qualify for a loan, some lenders are willing to work with you. If you can find the right loan, then it could give you the financial breathing room you need while you continue searching for a new job.
How unemployment affects loan eligibility and terms
In most cases, unemployment means that you’ve lost all of your income or at least the majority of it. With that, it is not surprising that your unemployment will affect your loan eligibility and terms.
A lower income is not the only way that your loan eligibility could be affected. With a lower income, your debt-to-income ratio will likely be affected. (more…)