Short term loans for bad credit or the unemployed – yes or no?

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Short term loans for bad credit or the unemployed – yes or no?


As long as the borrower can make timely, regular payments on a short term loan, they may be able to get one of the numerous different packages, with different criteria of qualification, designed to meet a borrower’s specific need. The basic characteristics of short-term loans are:

  • A short payback period (usually up to six months)
  • Extremely high-interest rates
  • Automatic bank account deductions to pay back the loan
By Editorial Team | 30th January 2019
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It may be difficult, but not impossible, to get a short-term loan if you are unemployed and/or have bad credit. Generally, when mortgage lenders and other long-term lenders deny you a loan, you may still be able to get short-term loans for the unemployed with bad credit if you demonstrate to the lender that you can make regular and on-time payments for the loan.

Another critical consideration before taking a short-term loan is to be absolutely sure about all risk that such loans hold. Below is some information that will help you decide.

Considerations for getting a short-term loan

Any loan, including short-term loans for the unemployed with bad credit, may involve the lender looking into the borrower’s credit history, credit score, regular income and/or alternative income sources. The different kinds of short-term loans may include, but are not limited to, the following:

  • Payday loans that accept unemployment benefits
  • Auto Title Loans
  • Emergency loans with no job
  • Debt Consolidation Loans
  • No credit check loan
  • Portfolio Line of Credit (PLOC)
  • Credit card cash advance loans
  • Pawn shop loans
  • Instant loans for unemployed (e.g., from
  • Emergency cash loans for unemployed
  • Short-term personal loans for unemployed or personal loans with bad credit (e.g., from
Reasons to get a short-term loan

Here’s why you should consider getting a short-term loan:

1. Minimal restrictions

Lenders who give short-term loans for the unemployed with bad credit do not pay as much attention to credit reports unlike traditional lenders (e.g., mortgage lenders). Instead, short term lenders focus on the borrower’s ability to pay back the loan. A useful resource to connect with such a lender is MoneyMutual.

2. Opportunity to repair your credit

If you are unemployed (and/or have bad credit) but have alternative sources of income, you can better your credit score so that you can improve your creditworthiness in the long-term. Alternative sources of income may include:

  • Pension/Retirement Fund, Disability Income, or VA Benefits Income
  • Money from educational grants (e.g., FSEOG)
  • Self-employment income
  • Unemployment Benefits
  • Interest and Dividends Income
  • Inheritance/ Trust/Estate Income
  • Spouse/Partner Income
  • Alimony/Child Support
3. Flexibility

With short-term loans for the unemployed with bad credit, you are not restricted to traditional payment methods. As such, you may be able to find a loan that fits your current situation.

For example, if you need an immediate cash infusion, you can get an auto-title loan even if you are unemployed and/or have bad credit.

Businessman accepting Japanese Yen money as a bribe, loan or payment in the office - panoramic banner
Short term loans offer financial flexibility (Picture: iStock by Getty)
4. Almost immediate

Traditional lenders often take anywhere from seven days to a few weeks to process a loan. Short-term loan lenders can deposit cash in your bank account on the same day you applied or on the following business day.

Reasons not to get a short-term loan

Here are some reasons why a short term loan may not be the best option for you…

1. Extremely high interest rates

Undoubtedly, you will pay more on a short-term loan (per instalment) than on a long-term loan. This is simply because the interest rate on short-term loans is very high and the payback period is short, on top of having to pay the principal sum of the loan each month.

2. Potentially even more damaging to your credit

If you manage to get a short-term loan and for some unforeseen reason you cannot pay the monthly instalments on time, you could end up having debt that you cannot manage. As a result, you will damage your credit score even more and put yourself in a worse off financial position that will be incredibly difficult to recover from.

Sad man looking at his wallet with money dollar banknotes flying out away
Short term loans can damage your credit score if you aren’t careful (Picture: iStock by Getty)
3. Desperation could lead you to an unscrupulous lender

Although most lenders of short-term loans are reputable, some unscrupulous lenders may offer you a loan with hidden fine print so that you may never be able to repay the loan without doing even more damage to yourself. Fortunately, most banks offer short-term loans that you can trust not to be unscrupulous.


The key to deciding whether short-term loans for the unemployed with bad credit are right for you or not, it is critical for you to not only understand what the terms of the loan are but to consider whether you will repay it regularly and on time. If you have any doubt, then it may be better not to take the loan, or you could end up in a worse situation.

Written by
Editorial Team
Our Editorial Team is constantly watching for new and exciting services to report on. They aim to bring balanced, honest reviews to the site to give you the best comparisons and ensure you have the knowledge to choose the product right for you. Read more.
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  1. Well I definitely enjoyed reading it. This post offered by you is very useful for correct planning.