How Can I Get a Loan or Grant if I'm Unemployed?

Getting a loan or grant while unemployed depends a lot on your overall financial situation. People with other forms of regular income, such as monthly retirement pay, may easily qualify for loans while unemployed. However, people relying solely on unemployment may not qualify for most loans because of insufficient income. Community-based grants are sometimes an option for unemployed people who are suffering from extreme hardships, but the help isn't widespread. Government grants are usually not an option. As of 2011, local, state and federal governments do not offer grants to people based only on unemployment.

Instructions

1

Contact a local charity such as the Salvation Army, United Way or a local chapter of the National Urban League. Describe your unemployment situation and financial status to a counselor. Ask for information about community grants. Churches and charities may offer one-time financial assistance to individuals and families struggling with unemployment. However, large cash payments of several hundred dollars are unlikely, as requests for help usually exceed available resources.

2

Borrow against a retirement or pension plan, if possible. Review your retirement holdings and call the customer service numbers for various plans you own. Ask if you are eligible for a loan. Loans from your retirement plan may not require proof of income, employment or even a credit check.

3

Apply for a loan from a bank or credit union if you have other forms of regular income. Apply anyway even if you don't have income other than your unemployment benefits. The bank could turn you down -- or approve the loan if you offer significant collateral, such as a certificate of deposit already on deposit at the bank or vacant land that you own. Approval depends on your specific situation, including your credit score, other debts and relationship with the bank.

4

Take a cash advance on a credit card you already have. Cash advances are loans, but they are expensive. Credit card cash advances usually feature an interest rate higher than the interest rate on regular credit card charges. Other fees are applicable as well. Ideally you should avoid this option because excessive credit card debt can lead to bankruptcy, especially during unemployment.

5

Get a payday loan. Payday loans are short-term loans with very high interest rates. Rates can exceed 300 percent, according to the Federal Trade Commission. Some online payday loan lenders offer loans without income or employment verification. However, the FTC strongly urges people to take the loans only if they have no other options. Network with friends and former co-workers in similar financial situations to find names of online payday loan companies offering loans without employment verification.