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Unsecured personal loans based on income and not a credit score can help select borrowers obtain quick funding for a vacation, Christmas gifts, or for emergency cash.

Sometimes young adults need a starting point. Other times, people with more experience need forgiveness for past mistakes or unfortunate circumstances that caused a black mark on their consumer report.

Lenders may agree to approve a personal loan online based on income only – provided you can manage the monthly payments, and verify the source of your earnings.

  1. Parameters for people with poor credit scores or no history
  2. How to manage the Debt-to-Income ratio for optimal affordability

Unsecured Personal Loans Based on Income Only

Unsecured personal loans based on income only are more difficult to find. Unsecured means that the lender has no collateral to repossess in the event of default. The lender also does not pull a copy of a consumer report or view your credit score – which draws from historical behavior to forecast future delinquencies.

Begin a personal loan online request here. Choose a principal amount and repayment term that is sustainable (see the next section for these parameters). Provide the subprime lender with complete information about your employment and current salary so that they can validate both.

  • Earnings source
    • Job employment
    • Self-employment
    • Disability benefits
    • Unemployment compensation
    • Rental income
  • Information about job
    • Length of employment
    • Employer name
    • Employer phone
    • Payroll frequency
  • Gross monthly compensation

Poor Credit Score

Someone with a high income but low credit score might gravitate to an unsecured personal loan based on earnings only. People with poor ratings often find it difficult to find a willing lender when they have negative history appearing on their consumer file.

They need to find an online lender that will focus more on their future high earnings potential, rather than on the sins of their past. Select subprime companies specialize in making underwriting decisions without pulling a copy a traditional consumer report.

Borrowers with bad credit must compensate for the negative history. The best way to make up for a poor rating is to shine in other areas. Be prepared to include these items on your request.

  • Confirm employment with employer name, address, and phone number
  • Show high-income relative to the monthly payment (see DTI section below)
  • Provide bank account and routing numbers
    • Confirms your identity
    • Allows for direct deposit
    • Ensures prompt payment

No Credit History

People with no credit history also seek out unsecured personal loans based on income only. First-time borrowers have no file for lenders to check or assets to pledge. Pulling a copy of a consumer report is pointless if the bureau returns a no record found. Asking for collateral is also pointless when the person owns nothing of value to secure the contract.

18-year-old young adults have two basic options to qualify without a credit check.

  • Federal government student loans hinge eligibility on enrollment in a certified college or university. Simply complete the FAFSA form and borrow up to $5,500 for your first year.
  • Online personal loan companies can hinge eligibility on wages exclusively. Young adults need to provide the lender with information to validate employment and salary. This may include the employer phone number, and past bank statements showing regular payroll deposits.

Personal Loans Based on Affordability

Getting a personal loan based on affordability instead of a credit score requires a common sense approach. Affordable means that the borrower has sufficient future proceeds to make the projected monthly payments on time and according to terms.

Begin a personal loan online request here. Both parties win when the consumer can borrow money and still live within his or her means. Set a modest budget for your vacation, Christmas shopping, or emergency repair. Manage to a comfortable Debt-to-Income ratio. Provide the lender with the ability to verify your earnings.


People who gain approvals for personal loans based on affordability keep the Debt-to-Income (DTI) ratio low. The DTI becomes the primary underwriting tool when lenders evaluate an application without a credit check.

DTI = Monthly Payments/Monthly Income

Borrowers with a high DTI often need to consolidate existing obligations. Their default risk is much worse when the monthly payment consumes a large percentage of earnings. The best way to improve eligibility is to lower this critical underwriting fraction.

The only way to improve DTI is to minimize the monthly payment. Three levers affect the periodic installment.

  1. Term length
  2. Principal amount
  3. Interest charges

This chart below illustrates how the original principal amount and the length of term interact to determine the monthly principle only payment. The interest charges are different for each borrower and are not included in the table.

12 Month3 Year

Length of Term

The length of the term affects the monthly payment size and influences an applicant’s projected DTI.

  • Short-term loans have higher monthly installments
  • Long-term loans have lower monthly installments

Interest Rate

Personal loan interest rates vary by lender and obviously affect monthly payments. However, borrower qualifications matter far more than the bank or company evaluating a request.

People seeking an approval without a credit check are often the least qualified. Therefore, expect these two “cost of money” charges to fall into the higher, rather than the lower range.

  1. Origination fee
  2. Periodic interest rate

Principal Amount

Keep the requested amount small to improve the chances for an approval. The amount of money a person can borrow based on income alone is limited. Without a credit check, the lender makes two types of adjustments that push up the installment size.

  1. Shorter terms
  2. Higher interest rates and fees

Income Requirements

Approvals for personal loans based on affordability rather than a credit check have stringent income verification requirements. Borrowers who ask the lender to ignore a missing or negative history must show strong evidence of a positive future.

A strong employment record and income verification is the best way to project a positive outlook. An online lender may ignore previous delinquencies caused by job losses, or past bouts of unemployment if your current job situation is solid.

This task is more challenging for some than others.

  • Self-employed contractors without earnings verification face an uphill battle
  • Single mothers often find it difficult to hold a steady job when childcare duties interfere
  • Dual-earner families can combine their household incomes to present the rosiest picture
  • Federal government employees have steady paychecks and enjoy great job security
  • Postal workers also have steady paychecks but face greater disability risks