Finding Loans for Unemployed Disabled People on Benefits

Finding loans for unemployed or disabled people on benefits can be challenging but not impossible. In this three part guide we will look at ways to maximize your chances of getting a loan by considering all the options available to unemployed and disabled people on benefits. There are many unscrupulous companies out there who are looking to take advantage of people who are disabled and unemployed by offering them same day money with little or no upfront fees, once you bind into the contract the interest rates and late payment fees become unbearable and most people end up in a financial mess. In this three part guide we look at how to avoid all the scams and find the cheapest loan for people on benefits.

Part 1: What Are You Eligible for

Apply for All Benefits and Increase Income

Before you start applying for loans you should ask yourself whether you really need the money. If you’re on a tight budget and are struggling to make ends meet while unemployed or on benefits it makes sense to defer your loan until your circumstances improve. 

If however you feel like you need a loan then before you apply you should check that you’re getting everything that you’re entitled to. If you’re unemployed or disabled you should be eligible for the standard benefits such as unemployment benefits and disability benefits. 

You could also apply for other financial assistance programs such as rental assistance, food stamps, energy and weatherization programs to help with utility bills. If you are able to increase your income and reduce your costs you will have more disposable income. 

The more disposable income you have the better your chances of getting a cheaper loan. You should check what benefits you’re entitled to using the USA.Gov eligibility tool.

Apply for Government Loans

The government also offers loans for disaster relief, if you’re unemployed or disabled and on benefits there are a number of government loans that you could be eligible for if you’re experiencing a crisis or disaster. 

You could apply for the Home and Property Disaster Loan through the U.S. Small Business Administration Department which offers timely financial assistance for homeowners and renters located in a disaster area.

Secured Homeowner Loans for People on Benefits

If you’ve got income coming in the form of unemployment benefits, disability benefits, alimony payments then you might be able to borrow money against your home. If your home has a decent amount of equity you could open up a line of credit using HELOC – Home Equity Line of Credit. This is very similar to a credit card and can be administrated through your bank or credit union.

Part 2: Loan Options for Disabled People on Benefits

Life Insurance Loans

If you have a term insurance policy or a whole of life policy you might be able to borrow money against this. You will need to call your insurance company and ask them to give you a current valuation on the policy. You can then go to your bank or credit union and ask them for a small loan by using the life policy as a securitized collateral.

Credit Cards Cash Advances

If you’re unemployed or on benefits you should be able to apply for a credit card however the interest rates on these will be very high. If you’ve got no other option then taking out a cash advance could be something you might want to consider. 

Before you take out a cash advance consider carefully whether you really need the money and workout exactly how much you’ll be paying back. Sometimes credit cards can charge over 40% for a cash advance and some of them will even charge fees. It’s up to you to sit down and work out how much money you need and how much you will be charged and how you plan to pay the money off.  

Loans with Co-Signers

If you can get someone to co-sign your loan you’ll be in a much better position to take out a loan at normal rates of interest. Some lenders are prepared to offer loans to people on benefits and sometimes unemployment benefits, disability benefits and alimony are considered as income. When you get someone to co-sign your loan make sure you can afford the payments otherwise you’ll be placing the co-signer under burden and it could eventually ruin your relationship with that person.

Car Title Loans

If you’ve got a vehicle that’s been paid for and you’ve got the title to prove it you could apply for a car title loan. You must have a valid driver’s license to and depending on the condition of age of your vehicle you could borrow anything up to $25,000 in certain states. Most lenders will allow you to keep the car as long as you can keep up with the payments, if you do miss several payments then your car might be repossessed and sold to pay for the loan.

Part 3: Other Loan Options for People on Benefits

Payday Loans

There are a lot of payday companies which consider unemployment benefits, disability benefits and alimony payments as reliable income, sometimes this source of income can be more reliable than having an actual paid job. There are a number of payday lenders that will loan small amounts of money to people on benefits; most of these lenders have a certain criteria stimulating that you must have income that exceeds a normal amount. 

This is usually $1000. If you’re benefit amount is greater than $1000 then you should be able to apply for these loans. These loans are very expensive and on occasions exceed 1000% APR. Again you need to sit down and consider how much you need to borrow, how much it will cost and whether you can afford to pay it back.

Debt Consolidation Loans

Debt consolidation could be the answer if you’ve got a lot of loans. If you’re taking out another loan to service these loan then you’ll be entering into a never ending viscous cycle of debt that will be hard to get out of. 

If you’re having difficulties making the payments while unemployed or on disability benefits you could sought the assistance of a debt management plan which would force all your creditors to share any surplus income that you have at the end of the month. 

Most of the time the interest rate will be stopped and you’ll only have to make one payment to the debt management company which then divides the money pro-rata and then send to your creditors.

Grants and Bursaries

If you’re unemployed, disabled and on benefits and need money to study then you should consider applying for grants, bursaries, fellowships and scholarships. 

There are literally hundreds of organizations and charitable foundation which offer financial help to students who want to further their education. 

You could enroll into a free proposal writing course which is offered by the Foundation Center and then pay for a subscription to search their database of grantees for money.

Pawnbrokers

Another option that you could consider is pawning items, if you don’t really want to get a loan and have valuables such as gold, jewelry, fine wine, electronics, or designer items you could pawn these items or sell them for money. If you decide to pawn them you need to keep up with the repayments of the loan otherwise the items will be sold.