How to Get a Loan With No Job and No Credit

January 24, 2023 6:37 pm41 commentsViews: 256

Without employment, it is nearly impossible to borrow money from a bank. Even those with jobs may find it hard to borrow money in the current credit environment. However, it may still be possible for someone on disability or even with no job to borrow money if there is valuable collateral available.

How to Get a Loan With No Job and No Credit

Even with valuable collateral, most mortgages and some auto title loans require a source of income for repayment since the lender may not get enough money from selling the house or car to satisfy the debt. Mortgages also require good credit. However, having bad credit is not a problem with a pawn shop loan and some auto title loans.

Why Borrow Cash Fast With No Job From a Pawn Shop?

Pawn shops have existed for a long time as a place to buy used goods as well as loan small amounts of money to those that need cash fast. Even those with bad credit or no credit qualify. Today, with the History Channel TV show “Pawn Stars” depicting pawn shops in a positive light, there is no shame in pawning the wedding ring as collateral for a short term loan.

If the borrowed money isn’t paid in full with interest, the pawn shop loan effectively becomes a sales transaction between the borrower and the pawn shop. In almost all cases, selling the collateral outright in the first place would have resulted in more money.

Getting a Pawn Shop Loan

The first thing to do is to find something valuable such as jewelry. Items that depreciate quickly such as computers are often not accepted. The pawn shop will determine how much he can sell the collateral for and offer up to 25% of that amount as a loan. The interest is usually around 10% per month but that amount varies considerably from shop to shop and from state to state.

If the loan is accepted by the borrower, the pawn shop will hand over a claim ticket which specifies the amount to be repaid including interest to get the collateral back. The claim ticket is good for a limited period of time. For example, in California, the claim ticket is good for 4 months and 10 days. If the claim ticket expires, the pawn shop owns the collateral. There is no penalty for not paying off the pawn shop loan other than the loss of the collateral.

Borrowing Money From an Auto Title Loan

For many people, their most valuable asset is not jewelry. It is the automobile. There are auto title lenders willing to use the vehicle as collateral for a loan. Just like with a pawn shop loan, the creditworthiness of the borrower does not matter. Even a bankruptcy is not a problem as long as it’s not a currently open case.

With an auto title loan, a loan is given for a fraction of the value of a car. Usually, the trade-in value is used. Keep in mind that some auto title loan shops require a source of income such as a job, unemployment benefits or disability income. But some places do offer auto title loans without income verification. The car itself needs to have clear title (car loan completely paid off). The vehicle must not have a salvage title.

Once the auto title loan has been approved, the borrower pays back the loan in installments The borrower will be able to keep driving the car with an auto title loan. If the loan is not repaid, the car is repossessed and sold to satisfy the debt.

Even during difficult times, it’s possible for those with no job and no income to borrow money. Even though the interest rates on these loans are extremely high, pawn shop loans and auto title loans can be a good tool for short term borrowing such as in between unemployment checks or disability checks.

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