The cold hard truth is that it is hard to get a loan with good terms through traditional lenders if you are unemployed with bad credit. The reason for this is obvious. Lenders are in business to make money. They are excellent at categorizing risk and, if they deem you a risk, will either decline to offer a loan at all or load it down with a high interest rate. This is not to say you can't get a loan while unemployed with bad credit but it will be more difficult.

Bad Credit Unemployment Loans

One avenue to pursue for a loan is called a bad credit unemployment loan, which is intended, obviously, for those with bad credit and currently unemployed. Under normal loan conditions, the lender uses your job as a barometer of your ability to pay back the loan. Your chances of qualifying will be greatly improved if you can find some method of showing you do have the ability to pay it back, like substantial assets, a hefty down payment--lenders like 25% or more under these conditions--or finding a co-signer with good credit. According to LowerMyBills.com, a bad credit loan is a great way to begin rebuilding your credit. Make all your payments on time and your bad credit loan interest rate can actually improve.

Home Equity

If you have the good fortune to have vested equity in your home, you can use that as a financial guarantee for a home equity loan or home equity line of credit. A home equity loan provides a lump sum payment, while a line of credit allows you to access your approved loan amount when needed, much like a credit card.

Research

Your best bet for obtaining a loan is education. Hit the Internet and Google the topic. You'll find plenty of companies outside the traditional area of banks, savings and loan, and mortgage companies. These companies are more willing to take on high risk customers. Just know that you will pay a higher interest rate. Your best bet would be to find one who will make a loan to you; then you pay it back according to the terms and develop a long term relationship with the vendor for future loans. You should also be aware that bad credit is one thing to a lender but unemployment is even worse, in their eyes. They have no way of ascertaining how you would be able to pay back a loan. This is where your Internet search comes in handy. Most third party companies outside the traditional lending industry have toll-free phone numbers listed on their website. Call and ask if they make loans to the unemployed with bad credit. It never hurts to ask and you might eventually find a lender to work with.

Source:

CreditLoan.com: Bad Credit Loans

LowerMyBills.com: Bad Credit Tips and Advice