Financial Help for People with Bad Credit
A bad credit score can seriously hinder one’s ability to acquire financial assistance during times of need. Not only are options fewer and farther between, they are generally associated with unfavorable interest rates and strict repayment terms. If you are looking for financial help, and currently have bad credit, consider these options.
Assistance for Low-Income Households
Low-income households may qualify for assistance through a variety of programs regardless of your credit score. Government programs may be able to provide funds for food, housing costs, and medical care. To receive government assistance, certain eligibility requirements must be met, and the exact requirements may vary from one program to the next.
An alternative to traditional government services may be found in a variety of non-profit organizations, including churches and charities. Depending on your current financial needs, you may be able to receive emergency funds and advocacy services. This can be an ideal solution to a temporary shortfall from which you will quickly recover.
Credit Counseling
Reputable credit counseling services can help people with bad credit by teaching them to make better financial choices. This can include improved management of your current financial situation, as well as advice on how to act in the future. Some credit counseling services offer debt management programs to help you pay back creditors more quickly.
It is important to thoroughly research potential credit counseling services. Not all who advertise themselves as advocates for those with poor credit are the same. Make sure the service is well-rated, and that they are willing to provide information about their services before you sign up.
Collateralized Loan
In cases where you require funds, and have no other available mechanism, you may be able to secure a loan by providing rights to specific collateral to the lender. Some people may be able to pledge part of the value of their home to back the loan, or the value of a vehicle in good repair. Since the collateral helps the lender feel more confident about the loan, you may receive more favorable terms. It is important to note that if you fail to meet the repayment requirements set forth by the lender, they will have the legal right to seize the property associated with the loan.
Personal Loans
Just because you have bad credit, that doesn’t mean you may not be able to secure a personal loan without collateral. While most people think of payday loans for quick cash when you have poor credit, it is important to understand that the interest rates associated with payday loans are extremely high. Traditional unsecured personal loans offered through banks, credit unions, or other reputable financial institutions can offer qualified applicants rates far below that of payday lenders.
If you aren’t sure if your current credit score will allow you to qualify for a traditional personal loan, you may want to check with your preferred bank. They may have the ability to process a soft credit inquiry first to determine your potential eligibility. Soft inquiries have no negative effects on your current scores, so you will not lower your current credit score simply by checking.
Potential Loans for Bad Credit Borrowers
As mentioned, many people think of payday loans as their only options but there are great alternatives. Many credit unions and banks have actually created their own short-term lending products, check out a list of different low income loan options here.
In addition, there are other specialized loans or financial assistance programs for most situations. Below is a small list of programs for common borrowing or financial needs.
Borrowing for a car – Depending on your situation there are a few options available to help you get in or repair your vehicle. For very serious financial troubles where qualifying for a loan may be out of reach, there are certain circumstances where a low income family may be able to receive a free car. In other situations, there are low income car loans available.
Government loans – If you are in or were in the armed services, there are certain lenders who provide veteran or military loans. This can include that actual military credit unions or other general banks. In addition, there is social security (SSI) assistance available, which can be in the form of a loan or additional benefits.
Help with Bills – If you are in need of money to help pay your general bills, such as for food or utilities. There are assistance programs for this as well. Taking advantage of these subsidies can help reduce your monthly budget and keep you from piling on debt. Get more info on help paying utility bills here and for assistance with food here.
Rent – Another large expense that drives people to sometimes borrow money is rent or a mortgage. If you need help paying your rent, there are a state and national programs available.
Low Income Financial Help provides a great deal of information on how individuals and families can get financial help. Find state, federal, non-profit and general organizations money assistance for every household living need. Whether you have bad credit, are unemployed or a low income earner needing assistance, there is help out there.
