If you lack traditional employment, you may be wondering whether it is possible to get a loan. After all, it may be difficult to repay a loan without employment income. While most lenders require that you have a regular source of income, that source doesn’t always have to come in the form of regular employment.
Here are several ways that you may get a loan even if you don’t have a stereotypical 9-5 job at the moment. Most or all of these involve an alternative source of income that you can show your prospective lender, provided that the lender accepts that particular type of income.
Employment Insurance Loans
You may be caught between jobs or have lost your job and are wondering whether you can get a loan. Most banks would not provide loans for people who are unemployed. If you’re receiving employment insurance or severance pay, this could be a form of income that some online or private lenders may accept. Some lenders understand that people’s circumstances vary and sometimes a loan is needed when an individual is out of employment.
Please know that the eligibility requirements and the types of loans offered may differ by lender. It is important to do your due diligence and find out which lenders offer your desired loan type.
ODSP Loans
The Ontario Disability Support Program (ODSP) is a government-funded program that provides financial assistance to Ontario residents who have a disability that disrupts their ability to work, take good care of themselves, or take part in community life.
The eligibility criteria for ODSP include the following:
- You must be at least 18 years of age.
- You must be an Ontario resident.
- You must have a physical or mental impairment that interferes with your daily functioning, is continuous or recurrent, and is expected to last one year or more.
- An approved healthcare professional must verify your impairment, likely duration, and restrictions.
- You must be in financial need, meaning that your income and assets are below the limits set by the program.
If you’re receiving ODSP payments, that is a source of income that some lenders will consider. You will need to have a record of disability payments. As long as you have an income and your application is satisfactory, you may get the necessary funds deposited in your bank account very quickly.
You Have a Guarantor
If someone is willing to co-sign a loan agreement for you, that could be another way to reassure the lender that you will be able to pay back the loan. If you are unable to make the payments, your guarantor or co-signer would keep you from defaulting on your loan.
Most guarantors are family members or friends due to the close bond between them and the person taking out the loan. That being said, anyone can act as a guarantor as long as they meet certain requirements. These can include the following:
- Have a Canadian address and have lived in Canada for a certain period of time
- Be the age of majority
- Have a good credit score of at least 650 or higher
- Earn a sufficient and stable income that can cover the loan payments in the event the borrower defaults
In essence, the guarantor must be willing to take over the loan if the borrower defaults on their payments. If the borrower is unable to make payments, the guarantor will have to pay the full loan as stated in the contract.
You Have Self-Employment Income
A self-employed person is someone who does not work for an employer that pays them a fixed salary or hourly wage. The self-employed person works for themselves, either as a freelancer or as a business owner. They are treated differently in terms of tax filing as well, although tax filing for them is a fairly straightforward process. A self-employed person has to report all of their income and expenses on their personal tax return, subject to the same tax rates as an individual earning traditional employment income. As long as you can demonstrate to a lender that you have an income pattern, chances are good that they will consider you for a loan.
You can submit our quick online application and be linked with a lender in a matter of seconds. Funds could be deposited in your bank account in as little as 24 hours. Choose Friendly Lender today!
You Have Investment Income
If you happen to have investment income, you may qualify for a loan with some lenders. Caught without cash? Friendly Lender may be able to help. Submit a quick online application and be connected with a lender in a flash!
The different types of investment income include bank accounts, term deposits, GICS, and other similar investments; Canada savings bonds; treasury bills; earnings on a life insurance policy; and foreign income. Additional types of investment income include shares, funds, and other units; capital gains or losses from information slips; principal residence and other real estate; transfers of capital property; capital gains and losses from a business or partnership; and gifts of shares, stock options, and other capital property.
Again, different lenders will have differing eligibility requirements and criteria as well as different offerings. Make sure that the lender you’re applying to offers loans on the basis of investment income if that is your main source of income. This will keep you from running into any unpleasant surprises.
In Summary
Most lenders will require that you have a source of income, whether it’s disability payments or employment insurance, in addition to a bank account, a permanent address, and a valid ID. When money’s tight, a quick loan may help offset any expenses. If you are currently unemployed, consider looking for lenders who offer ODSP loans, Employment Insurance (EI) loans, or other types of loans that may suit a person without regular employment.
Out of cash and don’t have traditional employment? Friendly Lender is here to help! As long as you can demonstrate a pattern of income, you could be connected with a lender in a matter of seconds via our super-easy online application. Apply now, and you may get funds as soon as the same day. Quick cash at the right time could help put you back on track. Even when things look bleak, a helping hand could improve the outcome.
