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Personal loans for people on benefits focus on the regular government check rather than proof of employment. Lenders love the reliability baked into these publicly funded entitlement programs.
However, the payments face possible interruptions. Disability programs entail periodic audits and re-certifications. Unemployment programs require evidence that you are looking for work.
More importantly, disabled and unemployed people frequently experience financial hardship. A sharp, sudden reduction in income can lead to adverse history appearing on your consumer report.
Bad credit, combined with uncertain future income make it expensive to borrow money. Therefore, proceed with caution and avoid getting yourself into more trouble.
Personal Loans for People on Disability
Personal loans for people on disability with bad credit often make the situation worse. A disabled person often deals with a challenging one-two punch that makes it very hard to stay current on obligations.
- The disability benefit replaces a fraction of earnings (never more than 70%)
- Medical bills needed to address the impairment often skyrocket at the same time
Having bad credit and a limited income makes it difficult and expensive to borrow money. Therefore, take out a loan only as a last resort.
- Approval rates are much lower
- Borrowing costs are much higher – if approved
- Larger origination fees
- Higher interest rates
Request a loan here if you have a real emergency need and the ability to repay the lender on time and according to terms. Select “Benefits” to answer the income source question on the online form. Be prepared to provide your driver licenses number and bank account and routing numbers.
Social Security Disability
Installment loans are accessible for people on Social Security Disability. Installment contracts feature fixed periodic payments (sometimes monthly) and repayment terms – often very short for those with bad credit history.
The considerations for borrowing money differ for people on SSI versus SSDI.
Taking out an installment loan for a disabled person on Supplemental Security Income (SSI) is rarely a good idea. SSI recipients receive a minimum monthly benefit, have few resources, and cannot often make informed decisions for themselves.
- The SSI program pays benefits to disabled adults and children who have limited earnings and resources. Countable resources must be below very low thresholds ($2,000 for an individual, $3,000 for a couple).
- The most common SSI recipient was born with developmental disabilities and may have physical, mental, and behavioral impairments. A legal guardian appointed by the court might be empowered to make decisions on behalf of this person.
- The local county Social Security office performs routine audits to verify ongoing eligibility. The office may suspend benefits and request a refund if the person fails to respond or holds assets above the threshold.
This SSI recipient description fits the profile of a person who gets him or herself into trouble by borrowing money – especially with high-cost cash advances featuring pricy origination fees.
Taking out an installment loan for a person on Social Security Disability Insurance (SSDI) is slightly better. SSDI recipients receive a somewhat higher monthly benefit ($1,200 vs. $500) and can have more resources because they paid into the system while working.
- SSDI pays benefits to you and some family members if you worked long enough and paid FICA taxes.
- SSDI eligibility requirements are stringent; the condition must limit your ability to do simple work for at least 12 months.
- Continuing Disability Reviews (CDR) mean that you are approved for only 3 to 5 years. Your condition may improve.
SSDI recipients may be a fine candidate for a cash advance provided he or she is several years away from a CDR and has a plan to repay the advance without rolling it over.
Personal loans for disabled veterans with bad credit are rarely the answer. Borrowing money may provide temporary relief from financial pressure. However, the high fees and interest charges can make matters worse for retired service men and women.
Disabled veterans with bad credit can sometimes borrow money via a cash advance for emergencies. However, a personal loan with longer repayment terms may not be realistic. Also, other resources exist that could prove more helpful over time.
- The Veterans Administration (VA) offers many programs to help with finances
- Social Security Disability is an option to double up on benefits for those with total impairments
Emergency Loans for the Unemployed
Emergency loans for the unemployed are another debt trap. People collecting unemployment benefits can borrow money based on regular government checks. However, someone without a job pays dearly for the privilege with high fees and interest rates because they often have bad credit as well.
Request a loan here using the acceptance letter from your state agency as proof of income. Cash advances are the most viable option because unemployment benefits hinge on you looking for work. Also, be advised of what happens with credit checks and the need for a bank account before proceeding.
No Job Verification
Unemployment loans with no job verification focus on government documentation. In this case, the lender does not require proof of employment or income. Instead, the lender needs to see evidence that the unemployment benefits will continue beyond the repayment term – unless you find a new job.
The state workforce agency should mail you a letter confirming the amount and maximum duration of your unemployment benefits. Or, the agency may allow you to print the document from their online portal. Present this letter to the lender during the underwriting process. You are borrowing against the faith in your local state agency – which helps your cause.
No Credit Check
Cash advance loans without a credit check are also appealing to the unemployed. It is tough to stay current on obligations when you are not working. Therefore, your credit report may have a few blemishes, or you may not want additional hard inquiries to suppress your score further.
Be advised, lenders who advertise “no credit check” may pull alternative reports. Equifax, Experian, and TransUnion are not the only providers of consumer reports. Also, FICO is not the single score that predicts future delinquency.
No Bank Account
Loans for the unemployed with no bank account may be impossible to find as well. While yet another popular search term, it is a very unrealistic expectation. Beware of any website promising to lend money to someone without a job or the ability to send a check to repay an obligation or cover the rent for an apartment.
Lenders will shy away from approving an unemployed person without a bank account. The finance companies want to set up an automatic draft from a checking account before they agree to lend money. Electronic payment lowers default risk and makes lending to subprime borrowers without a job feasible.
Free loans for the unemployed do not exist. Expect to find the exact opposite of free – costly borrowing terms (hefty upfront origination fees and high interest rates). While being laid off is an unfortunate situation, very few organizations are willing to lend money at no cost to you – especially when your ability to repay the funding is poor.
Free loans for the unemployed are a popular search term online. However, it is a very unrealistic expectation. Perhaps friends and family members are in a position to help you out.
Unemployed single mothers with bad credit can sometimes borrow money free. Friends and family members are more sympathetic towards women struggling to raise children by herself.