Hardship Loans

Need to apply for a personal loan due to financial hardship? Bills has advice on hardship loans to help you solve your money headaches.

I need to apply for a personal loan due to financial hardship. Where can I go for a hardship based loan?

Read full question
Bill's Answer
4.0
/5.0
(8 Votes)
Bills.com Team
Pro

By

Highlights


  • Review our 6 tips for hardship based loans and alternative loan products.
  • Look at a refinance loan first, if you own a home, before you explore more costly unsecured loan products.
  • Consider help from a debt relief provider as an alternative to a hardship loan.

Thanks for your question on hardship loans and getting financial help when you are financially struggling.

If you do not have any collateral, what you seek is a signature loan, also called an unsecured loan or personal loan. Personal loans are risky for lenders due to their lack of security and relatively high default rate. Therefore, lenders charge higher interest rates on personal loans, especially those for people with a checkered credit history.

If you own a home with equity, start by seeing if you can qualify for a refinance loan. Refinancing could offer you the lowest costs, especially when interest rates are low. If you don't own a home, or can't qualify for a refinance loan, then examine the different alternative personal loan products, but pay close attention to the costs and the interest rates involved.

Depending on your financial situation, there may be a few alternatives to a traditional personal loan that could assist you in resolving your debt.

Six Hardship-based Loan Suggestions

First, read the Federal Trade Commission document, "Payday Loans Equal Very Costly Cash: Consumers Urged to Consider the Alternatives." You may not be considering a payday loan (I strongly discourage payday loans), but the FTC's suggestions are sound. I recommend reading the document to determine if any of the suggested alternatives to payday loans will work for you. Payday loans are only good as a very short-term hardship loan, when you are certain you can pay it back right away.

Second, consider a loan from Prosper, which is a peer-to-peer lending and investing company. Current rates from Prosper range from 6.73% APR to 34.59% APR, as of February 2014, depending on how Prosper evaluates your credit.

Third, look at Lending Club, another peer-to-peer lender that may offer you a loan. Lending Club interest rates range from 6.78% to 28.69%, also as of February 2014.

Fourth, if you have a 401(k) account, ask your 401(k) plan administrator if loans are allowed under your plan. A 401k loan can offer good rates and does not incur taxes, if you pay it back as agreed. Not all plans allow loans, or limit loans to certain circumstances. I do not recommend taking a hardship distribution from your 401(k), as opposed to a loan, unless you clearly understand the repayment terms and the potential tax implications.

Fifth, visit the Bills.com Bills.com Loan Resources page to learn more about the loan options available to you.

Sixth, if your credit score is not excellent but is improving, look at unsecured loan options from FreedomPlus. FreedomPlus is a new lender that looks at more than credit scores. It's underwriting considers other data, giving borrowers a chance to express their creditworthiness. Loan terms range from two to five years, with a maximum loan amount of $35,000. Interest rates range from 7.49% to 29.99%, as of February 2014.

What if a Loan is Not Right for You?

Hardship loans are not always the best solution, even if you qualify for one. If you are struggling with debt, check out all your debt relief options, including the services of different professional debt relief provider.

You can learn more about debt settlement, credit counseling, debt consolidation loans and all other forms of debt relief at the Bills.com debt relief hub.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

27 Comments

Recent Best
1500 characters remaining
  • 35x35
    Oct, 2012
    Revelita
    Iwas told not to come to work until further notice due to low cencus. I was assured I still have my benefits and will be receiving a paycheck but that will come out of my PTO bank which to me is not fair. Is this legal. I do not have enough PTO hours left in my pto bank, and I was not advised how long this "temporary" set back will last. My question is: Can I apply for hardship loan from my hospital, instead of them exhausting my pto hrs? Can I draw un-employment,while waiting for my hospital to call me back to active duty(all unit-co-ordinators are in the same situation). Thank you
    0 Votes

    • 35x35
      Oct, 2012
      Bill
      I don't fully follow your questions. If you're asking if you're eligible for a hardship loan on your retirement account, I recommend you speak with the retirement account administrator. To see if you're eligible for any unemployment compensation, speak with the agency in your state that pays out the unemployment checks.
      0 Votes

  • 35x35
    Feb, 2011
    Robert
    I have been fighting to get diability since "2003" I fianlly won my case and I am expecting a large check. The "IRS" has a judgement against me for $58k for taxes they alledged I owed from 2003..They never contacted me with regard to the above. Yet they managed to seize my bank account and wipe out my entire $40 savings...Yes thats all I had. My question is this, Can I do a bankruptcy to dismiss this or what are my options? I have no assets other then the home I live in.
    0 Votes

    • 35x35
      Feb, 2011
      Bill
      Regarding bankruptcy, if your IRS debt is related to unpaid income taxes, then there are three criteria for discharging an income tax debt in a bankruptcy:
      1. The taxes must be due for three years
      2. Have been filed for two years
      3. The assessment must be in place for at least 240 days

      Consult with an attorney experienced in tax law regarding your IRS debt and your bankruptcy question. I find it unusual that the IRS surprised you with $58,000 tax bill and a levy of your bank account. Alternatively, consult with a tax debt specialist such as Freedom Tax Relief to learn if an offer in compromise (OIC) is a viable option.

      0 Votes

  • 35x35
    Jan, 2011
    erika
    I am in the biggest mess of my entire life!!!! I am only 30 as of 3 months ago. Lets jump back 2 years....I'm a licensed sleep technologist, making $25 an hour, owned a house with my fiancee. This was from 2002-2009. Now check out THIS mess! Fiancee went psycho, I had to move to an apartment with my name still on the house. I fell asleep while driving in the parking lot of my apt complex (ironic due to my job i know). I hit the tire of a truck going 15 mph, TERRIBLE I KNOW lol. Since I take xanax AS PRESCRIBED they arrested me for a DUI since you are not supposed to take that while driving. They gave me a breathalizer (it was 0) and a field sobriety test (I passed), but still arrested me. So I had to walk into my place of work (the hospital) in handcuffs to make sure I wasn't HURT (geez) Luckily the prosecutor dropped it down to reckless driving, but they still put me on probation. They took my daughter away to live with her dad. Found out a week later my lab (job) was getting shut down. Applied for unemployment. Since there was a mix up with who knows what I called every week, and was told I might not get my money until september (this was now may). 2 weeks later just after I lost my insurance I found out I had to get surgery!!! In the meantime we are in the process of a THIRD shortsale on the house I own!!! I had to withdraw all of my retirement money just to LIVE ON until I got my unemployment. There are no jobs in my field in michigan. I have applied many other places who say I am overqualified! My PO will NOT let me leave the state until I pay my counseling and other court fines. I couldn't afford my tags on my car, then I couldn't pay my car insurance AND car payment, AND rent, plus now over 10k in medical bills. Then I just got a flat tire LOL. Expired tags, flat tire, no insurance! I'm so screwed lol. I'm actually selling all of my stuff (Wii, couch, TV, armoire, bed set, etc. just to pay bills! I have no where to go....no basement to live in....HORRIBLE credit now so there is no way anyone would accept an app for even a low income studio apt! Now I just got friend of the court papers!!!! AHHHHHHHHHHHH!!!!!!!!!!!
    0 Votes

    • 35x35
      Apr, 2011
      Rosana
      My dearest Erika, This is late as u wrote in Jan 2011. My only consolation is reaching out to others family or friends, let them know just as u had here. I would get on the internet and find another hospital to work at, VA hospitals are truly "gems" for genuine caring for patients veterans and Im sure this applies to employees, consider moving if it means gaining a job, the VA really uses the internet for job resumes, I believe the website for Government jobs is USA.gov on the site you can make a resume for hard copy but most importantly for downloading to many jobs on the sites. I am a retired vet and am thankful for the philosophy they demonstrate. There are 3 sites for gov jobs.
      0 Votes

    • 35x35
      Oct, 2011
      Vaughn
      Erika my heart goes out to you. My wife became very ill also about 7 years ago. took 2 years to get longterm disability to agree she was just to sick to work. She didn't get out of bed for 6 years. We also lost everything including our all most perfect credit score. After 2 R9's had been placed against us it took 6 years in canada for them to be lifted and much hard work on our part to slowly see some relief. Keep your chin up not everything is your fault. Also consider going after the insurance company for financial stress they have caused you. Not sure about the US but in Canada you can, now I find this out great. We have 3 children and we all have suffered greatly because of this. But If I could help you I would!
      0 Votes

  • 35x35
    Dec, 2010
    Maria: Lawyers are not miracle workers. Based on the scant information provided by Steve on 6/17/2009, I would have to guess Steve's attorney filed a Chapter 13 bankruptcy. Chapter 13 stalls foreclosure proceedings temporarily until a five-year creditor repayment plan is established. Steve was negligent in not negotiating a short sale, deed in lieu of foreclosure, mortgage modification, or short-refinance before foreclosure proceedings began. A Chapter 13 is a last-ditch effort to save a property you want to keep. The other options I mentioned are less costly and offer a more permanent solution.
    0 Votes

  • 35x35
    Aug, 2010
    Mrs
    Hello, Do you need a loan to enhance your business? Loan to consolidate your debt,Loan for personal use, Loan for credit Card, Medical Care loan, Car Loan,Mortgage Loan, Student Loan, loan for any purposes? e.t.c.
    7 Votes

  • 35x35
    Feb, 2010
    Bill
    First, understand the process and the consequences if you do not take action: How to Stop Garnishment on Student Loans. Second, take action. Read the Bills.com resource Student Loan Forbearance to learn how to ask your bank for a forbearance.
    0 Votes

  • 35x35
    Feb, 2010
    Joy
    I am in default of a school loan that I really really need to pay back, however I don't have any money to pay this loan back. What should I do?
    0 Votes

    • 35x35
      Jun, 2011
      nick
      there is something out there got to keep looking everybody gets help try you will make it
      1 Votes

  • 35x35
    Jan, 2010
    Bill
    If you want a conventional home loan (either a deed of trust or mortgage depending on your state), you need to stop working underground and repair your credit. Lenders want three things from borrowers: 1) A strong credit score, 2) A stable employment history, and 3) Proof of income. By working underground you have no 1099s, W2s, pay-stubs, or tax returns to prove to the lenders that you have a stable employment history. Therefore, consider using the $70,000 in cash you have to resolve your collection accounts so that your credit history will improve. Also, consult with a tax attorney to resolve your federal and state tax issues. Finally, do not be tempted to take a loan from anyone willing to lend you money in your present situation. The interest rate will almost be usurious and untenable.
    1 Votes

  • 35x35
    Jan, 2010
    Georginna
    I want to buy a house.my job is under contract .I got some cash to put down 70% on a $100,000.00 home but i need a loan $30,000.00.I have a poor credit,No file tax for the last 2 yrs.Can you help me to get a loan?
    0 Votes

  • 35x35
    Oct, 2009
    Bill
    You will have a difficult time finding a bank or reputable lender give you a loan when your income is unemployment benefits. I suggest you review What Are My Debt Resolution Options? to understand your rights and options for consolidating your debt. You should also check out the bills.com page on Debt Relief for debt tips and advice. Good luck.
    0 Votes

  • 35x35
    Oct, 2009
    Pj
    Hello, I have lost my job last month and have filed for unemployment. But I am in debt for $36,000. Any IDeas for me on how I could get a loan ro where I can go?
    0 Votes

  • 35x35
    Sep, 2009
    Bill
    Bills.com does not provide direct lending of any form and is not a lender. Ours is a site that provides purely information, tips and resources. You can use our resources to apply for a cash out equity loan (if you own a home).
    0 Votes

  • 35x35
    Sep, 2009
    Kevin
    I Need A Loan To Pay Off My Dedits. And Go For A Business Loan To Get My Business Started. I Have Been In Business For 8 Months. Please? Help Me To Get My Business Up And Get It Going. Plus Pay Off My Dedits At The Same Time. But With Out the Fee To Start With.
    2 Votes

  • 35x35
    Aug, 2009
    Diamond
    Hi Steve, OMG, I am so happy for you. Can you provide more info, on Daniel?
    0 Votes

  • 35x35
    Jun, 2009
    STEVE
    hello: I want to share my personal story with anyone who is interested. I was a loan officer in the retail housing market. I know for a fact that any loan that will help anyone in this situation is going to be hard money and will cost a small fortune in points and closing costs. about 6 months ago I was searching for a new job, any job just to somehow bring in enough money to meet my monthly bills. I had been a few months behind on my mortgage and did receive a few letters from the lender. two weeks ago I had a good friend visiting from Washington state. we were about to go on a hike and there was a knock on my door. I thought it was just some solicitor. I was going to get mad at the person because I have a sign on my front door "no solicitors".when I asked him what he wanted he said that the bank had sent him out to "change the locks on the doors". I was frozen with fear and felt sick to my stomach. I immediately tried to call the lender and after hours of endless waiting I was told that my house was scheduled to be sold in two weeks. The only possibility to save my home was to send them a cashiers check for $40,000. I was in a panic and my neighbor told me about a law firm that helped him. I did not even know that he was in trouble just like me. I called this law firm and within two days they stopped the foreclosure and dropped my payment in half. the best thing is that to start the program I only had to come up with a certified check for around $900.00 which I sent to the bank. The law firm was even able to work with me on their fees and allowed me to make a down payment to them. These guys were the best. they saved my life. I highly recommend that anyone in my situation give them a call. The guy that I dealt with was Daniel. I hope that this helps anyone facing the same situation as I did. Thanks: Steve
    0 Votes

    • 35x35
      Dec, 2010
      Maria
      Can you please tell me what law firm this was? I'm in need of some help. I got hurt at work over a year ago and have a lawyer fighting workers comp but have no income right now except my husband and affraid of losing my home.
      0 Votes

    • 35x35
      Jan, 2011
      Sharon
      There is no mention of the name of the organization that helped you or anything. I am confused. I would like more info please
      0 Votes

  • 35x35
    May, 2009
    Bill
    Unfortunately, Bills.com does not provide direct lending of any form and is not a lender. Ours is a site that provides purely information, tips and resources.
    1 Votes

  • 35x35
    May, 2009
    Armando
    I need a hardship loan to stop a sale of my co-op apt. By 2PM 5/15/09 I need about $11,000.00 and I still have equity of $70,000.00 I am a divorced father of two and this is my only place my kids can come and stay with me. I live in New York City.
    0 Votes

  • 35x35
    Apr, 2009
    Jesse
    I have yet to come across lenders that provide loans based on hardship. Your best option is to apply for student loans, where you do not have to start the repayment till you finish school.
    0 Votes

  • 35x35
    Apr, 2009
    Donald
    My wife and I are both full-time students at ITT-Tech. I make $310.00 dollars a week and we just keep getting further behind. Do you know of any hardship loans we could apply for to help us get thru till we graduate.
    15 Votes

  • 35x35
    Apr, 2009
    DONNA
    MY HOME IS IN DANGER OF FORECLOSURE AND I NEED ABOUT 6000 TO GET MY SELF OUT. I WANT TO STAY IN MY HOME.
    5 Votes