Can I apply for a loan if I’m unemployed?
If you are out of work, finding a personal loan can feel difficult. Some lenders may focus heavily on employment status, a single score or automated rules.
At 118 118 Money, we’re a direct lender and we look beyond just one part of your situation. If you have regular income, pass our credit and affordability checks, and the repayments are manageable, you may be eligible for a loan.
If you’re not sure where you stand, start with our eligibility check. It lets you see whether you are likely to be accepted before you apply, and it won’t affect your credit score.
How the affordability check works (in plain English)
Affordability is about whether the monthly repayments are manageable. As part of the process, we’ll assess your regular income and outgoings to help make sure the loan is right for you.
This matters especially if your income has changed, your benefits are being adjusted, or you’re balancing priority bills alongside everyday costs.
Check lower-cost help first
A loan is a commitment, so it is worth checking whether lower-cost support could be available before paying interest on credit. If you receive Universal Credit, you may be able to look at a Budgeting Advance for certain one-off costs.
For independent guidance, you can review GOV.UK guidance on Budgeting Advances or use MoneyHelper’s Budgeting Loan and Budgeting Advance guidance before deciding whether a personal loan is right for you. If your income includes benefits, you can also read our loans for people on benefits guide.
What can impact eligibility if you are unemployed and have bad credit?
Bad credit can mean different things. It might be caused by missed payments, defaults, CCJs, using a lot of available credit, or having a limited credit history. Being unemployed can make affordability more important because lenders still need to see how repayments would be made.
Every application is assessed individually. If accepted, keeping up with repayments can demonstrate positive repayment behaviour over time.
