When you have a strong credit score or own valuable assets, it can be frustrating to be denied financing because of your current income situation.
Traditionally, personal loans require proof of income to ensure the borrower can repay the loan. However, some situations and types of loans don't strictly require income verification. In fact, some lenders prioritize collateral, while others are eager to work with excellent-credit borrowers. This post will explore options for a personal loan with no income verification and alternative solutions to consider.
Can you get a personal loan with no income verification?
Yes, it's possible to secure a loan without income verification. While no loans are designed explicitly as "no income verification" loans, some lenders and products work with non-traditional income, have no income requirements, or don't require income verification.
Loans with non-traditional income
When exploring what’s best for you and your unique situation, it’s important to understand the concept of income regarding borrowing. Many borrowers don’t realize that lenders consider a multitude of revenue streams as qualifying income. If you can showcase a consistent monthly cash flow, you’ll not only have better rates and fees but more options available to you.
Most lenders are flexible and count the following as income when determining your eligibility:
- Rental income: If you own rental properties, the income generated from these can be considered as part of your loan application.
- Social Security Income (SSI): SSI can serve as proof of income for retirees or those on disability.
- Disability benefits: If you’re on disability benefits, then you have a stable and predictable income.
- Alimony and child support: Regular payments from a divorce settlement can also count as income.
- Investment income: Dividends and interest from investments can be included in your income verification.
- Freelance work: Earnings from freelancing or gig jobs can be used, provided you can prove a consistent income stream.
- Self-employment income: Financing for self-employed borrowers tends to require more documentation, but there are plenty of options available.
Personal loan (no income verification) options
Personal loans for excellent credit borrowers
If you have excellent credit, meaning a score of 720 or higher, it’s possible to be approved for a personal loan without traditional income verification. This is because a lender may see you as low risk due to your strong history and responsible financial behavior.
Some lenders don't even have set income thresholds for excellent credit borrowers and will instead determine eligibility based on creditworthiness alone.
- Loan amount: $1,000 to $100,000
- Funding timeline: A few business days
- Requirements: 720 credit score, good credit history
Well-known personal loan lenders include Upgrade and Universal Credit.
Secured personal loans
Secured loans require borrowers to pledge an asset as collateral. If the borrower defaults, the lender can seize the collateral to recoup its losses. Adding an asset, like a savings account or certificate of deposit, provides security for the lender, reducing the need for extensive income verification.
It can also give you, the borrower, better chances of approval and more favorable terms than unsecured loans. Secured loans are a great solution for high debt-to-income borrowers and borrowers with poor credit, too.
- Loan amount: Up to $50,000
- Funding timeline: Days to weeks
- Requirements: Sufficient collateral; other requirements vary from lender to lender
A few well-known lenders include Navy Federal Credit Union, KeyBank, and Upgrade.
401(k) loans
A 401(k) loan is a unique form of financing—you borrow money from yourself and repay it with interest, which also goes to yourself.
You tap into your 401(k) account for cash, then repay through payroll deductions over a 5-year term. 401(k) loans are not based on your creditworthiness or income—you just need an eligible plan to qualify.
Before borrowing from your 401(k), be sure to consult a financial advisor; they can help you understand the risks of leveraging your retirement savings.
- Loan amount: 50% of your vested account balance, up to $50,000
- Funding timeline: Days to a couple of weeks
- Requirements: An eligible 401(k) plan
Pawnshop loans
Pawnshop loans involve borrowing money against the value of personal items, such as jewelry, electronics, or other valuables. The pawnshop holds the item as collateral until the loan is repaid. If you fail to repay the loan plus interest, the lender can keep and resell the item.
- Loan amount: A percentage of the item’s value
- Funding timeline: Same day
- Requirements: Valuable collateral
Title loans
A title loan is a type of loan that leverages your vehicle as collateral. You retain ownership and can continue to drive the car but temporarily surrender the title until the loan is repaid.
Title loans should be approached with caution—left as a last resort. Exorbitantly high interest rates and short terms (15 to 30 days) can easily create a vicious cycle of debt.
- Loan amount: Up to 50% of the vehicle’s value
- Funding timeline: Same day
- Requirements: A vehicle in good condition and owned outright
Competitive alternatives to consider
Home equity investments
Why it’s worth exploring: No income verification or requirements
If you're a homeowner with sufficient equity in a primary or investment property, you can leverage your home's wealth for cash. Although traditional equity tools, like HELOCs and home equity loans, require income verification, a home equity investment (HEI) does not.
An HEI allows you to tap into your equity for a single lump sum payout. You get cash today in exchange for a share of your home's future appreciation. There are no monthly payments over a flexible 30-year term. Instead, you buy back your equity via a balloon payment when you sell the home, refinance, or use another cash reserve.
- Amount: $20,000 to $500,000
- Funding timeline: 4 to 8 weeks
- Requirements: 500 credit score or higher, sufficient equity, a home in an eligible location
- Cost: Appraisal fees and closing costs
You can get an HEI estimate with no impact on your credit score or commitment to qualify.
401(k) hardship withdrawal
Why it’s worth exploring: No income or credit score requirement
Although it's generally bad practice to dip into your retirement nest egg early, there are times when urgent demands make it justifiable. The IRS refers to these "immediate and heavy" needs as financial hardships.
With a qualifying hardship, you can withdraw money from your retirement account early without being on the hook for repayment. Because leveraging your retirement savings can lead to a major shortage in your golden years, it’s best to carefully weigh the pros and cons and talk to a financial advisor.
- Withdrawal amount: Enough to cover the cost of the financial hardship
- Funding timeline: Days to a couple of weeks
- Requirements: An eligible 401(k) plan and a qualifying hardship
- Cost: Income tax, potential early withdrawal penalty
Home equity loan/home equity line of credit
Honorable mention
Finding a no-income verification home equity loan or no-income verification HELOC can be challenging but not impossible. Some lenders are more flexible and willing to consider alternative sources of income. If you have substantial equity in your home, a good credit score, and reliable cash flow from non-traditional sources, like social security or rental revenue, you may qualify for a loan.
A home equity loan provides a single lump sum payout that is repaid via set monthly payments. A HELOC acts like a credit card, offering a revolving line of credit that can be drawn upon as needed. Once the draw period ends, the repayment period begins, and you’ll be responsible for monthly payments at a variable interest rate. Both offer low interest rates and repayment terms between 5 and 30 years.
- Loan amount: 80% to 85% of your home’s equity
- Funding timeline: 4 to 8 weeks
- Requirements: Sufficient equity, a credit score above 620, a debt-to-income ratio of 43% or less, income requirements vary by lender
- Cost: Income tax, potential early withdrawal penalty
Final thoughts
When your income is not as strong as your credit profile or assets you have, no income-proof loans can feel like a lifeline. By exploring your options and comparing lenders, you can find a product that works best for you.
Each option has its own requirements, benefits, and risks. So, it's crucial to carefully consider these factors and seek professional financial advice if necessary.
If you are a homeowner, see how much you can qualify for with a Home Equity Investment from Point – a home equity solution with no income requirements.
