Personal Loans for People on Disability Benefits: Bad Credit

Finding loans that accept disability benefits is easier than you think.

Lenders love the reliability baked into government-funded programs that send regular monthly checks! The money keeps coming despite recessions, depressions, pandemics, earthquakes, hurricanes, and other acts of God.

However, disabled persons receiving Social Security benefits often have a bad credit history because a limited income combined with high medical bills is a recipe for financial hardship.

Therefore, the secret to success is to keep your requested amount small. You avoid future delinquency, and individuals ensure they do jeopardize eligibility for these crucial government benefits.

Loans for People on SSDI With Bad Credit

Loans for people on Social Security Disability Insurance (SSDI) benefits enable recipients with bad credit to borrow money against future government checks without jeopardizing their eligibility.

SSDI covers workers that funded the system via FICA payroll taxes. Therefore, resource limits are not a concern. However, you still want to keep the amount small to avoid future defaults.

Personal Loans

Personal loans for people on Social Security disability benefits can help SSDI recipients with lousy credit. The reliable government benefit checks raise the minimum FICO score requirement, improving approval odds.

It’s easy to request a personal loan for SSDI beneficiaries, who do not have to concern themselves with resource limits. Get a fast answer by being prepared to complete the online submission form correctly the first time.

  • Keep the requested amount to the bare minimum needed
  • Indicate the reason you need the money (emergency situation)
  • Select “Benefits” as your income source
  • Have two necessary documents handy  
    • Driver license number
    • Bank account and routing number

Personal loans feature equal installments spread over several months, making it easier to afford each payment – especially when you keep the requested amount small.  

No Credit Check

Disability loans with no credit check may appeal to people on SSDI with adverse information appearing on their consumer report. Remember that you might pay a premium (higher interest rates or origination fees) when working with a lender that ignores this crucial underwriting tool.

Personal loans based on income only do not require a credit check because the subprime lender agrees to ignore adverse payment history. Approval is possible because government benefit checks are incredibly reliable. However, you need to keep the requested amount extremely small to succeed.

Payday Loans

Online payday loans that accept SSDI disability beneficiaries are more abundant because the repayment terms are shorter. The lender faces a lower default risk when the balance is due within less than 30 days.

Beware that payday loans for people on disability can prove costly. They charge origination fees ranging from 10% to 30% of the amount borrowed, which add up quickly if you roll over the obligation (fail to pay the entire balance when due in several weeks).

Payday loans for SSDI recipients make sense only when you can retire the balance quickly. However, disabled individuals on Social Security benefits rarely have this ability.

Loans for People on SSI With Bad Credit

Online loans for people on Supplemental Security Income (SSI) with bad credit require attention to detail. You could inadvertently jeopardize eligibility for these government benefits by violating several rules.

SSI addresses the needs of adults and children with limited earnings and resources who never paid FICA taxes. Therefore, the Social Security Administration requires conferees to follow specific rules.

  1. Countable resources cannot exceed specific limits
    1. $2,000 for an individual
    1. $3,000 for a married couple
  2. The funding is for food, clothing, and shelter only
  3. You can own one automobile for transportation

Home Improvement

Home improvement loans for disabled people are often unnecessary. SSI recipients qualify automatically for another government benefit with more attractive terms.

Free home repair grants for the disabled are possible through the Weatherization Assistance Program (WAP), which provides energy-efficient upgrades to low-income households at no charge. SSI beneficiaries meet the WAP eligibility criteria automatically.

Why borrow money for energy-saving home improvements when government assistance might be readily available?

Cash Advances

A cash advance on disability payments is relatively safe in the beginning for SSI awardees because you can only borrow a small percentage of your next government check. Therefore, you do not jeopardize eligibility by ballooning countable resources.

However, cash loans for SSI recipients can quickly cause problems. In most cases, people relying on the government do not have the financial muscle to retire the obligation immediately.

Explore three options before getting an advance on your disability check.  

Payday Advances

Online payday loans for SSI recipients are cash advances using a different name. They begin safely because the borrowed amount is small, but the balance owed can balloon if you roll over the obligation multiple times.

Payday cash advances charge hefty origination fees. If you roll over the balance (fail to pay it off with your next disability check), the amount owed can snowball, as shown by this chart illustrating a 30% origination fee.

MonthAdvanceOwed
1$210 
2 $300
3 $390
4 $507

Advance Apps

Cash advance apps for disability might have lower origination fees than online payday lenders because of the extra money-management features they offer. However, only a handful of apps currently accept government benefit payments.

The lower origination fees possible with cash advance apps slow the growth of balances. This chart illustrates a 15% origination fee.

MonthAdvanceOwed
1$255 
2 $300
3 $345
4 $397

Direct Express

A Direct Express emergency cash advance has the lowest origination fees because you are not borrowing money from a third party. This option helps people without the use of their debit card because it was lost, stolen, or rendered inoperable.

For instance, MoneyGram or Western Union can quickly transfer money held in your Direct Express account for emergency spending while waiting for your replacement debit card to arrive in the mail. 

Without Bank Account

SSI payday loans without a bank account can use your Direct Express debit card to receive the proceeds. The application process is nearly identical, except that you must provide the card number and PIN rather than a routing and account number.

If approved, the lender will transfer the SSI payday loan proceeds straight to your Direct Express card, which you can use to address your emergency need without a banking account.

Payday loans without a bank account have a hidden drawback (aside from the high origination fees illustrated above). SSI recipients should only spend the money on food, clothing, and shelter. The Direct Express debit card tracks purchases, which the Social Security Administration might examine during periodic redetermination audits.

Therefore, do not buy luxury goods with your debit card.

Car Loans

Secured car loans for people receiving SSI disability require special attention to detail. You face possible eligibility violations before and after the vehicle purchase – even though the lender sends the funding to the dealer.

  1. Saving up money for the auto loan down payment could cause you to exceed the limits on countable resources.
  2. You may have to report buying a second car to SSI, but not the first vehicle used for transportation by the household.

The Social Security Administration automobile ownership rules exclude the value of your first car from countable assets regardless of the current market value. However, they count the equity value of the second vehicle.

Installment Loans

Installment loans for SSI recipients can create problems with future eligibility. An installment contract features monthly payments, which means you can afford to borrow more if approved.

However, the Social Security Administration might examine your account balances during a periodic redetermination audit. They could find installment loan proceeds deposited into your account, which could cause eligibility problems with resource limits.

  • $2,000 for individuals
  • $3,000 for married couples

Also, personal loans for SSI awardees are installment contracts using different names. Do not allow these confusing synonyms to cause eligibility problems. Please be careful!

Frequently Asked Questions

Scan this list of frequently asked questions to understand better loans for people on Social Security Disability with bad credit history and low FICO scores.