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Hardship Loans

I need to apply for a personal loan due to financial hardship. This is the first time I have been in this position. What advice can you give about getting a hardship loan to help solve my money headaches?

I need to apply for a personal loan due to financial hardship. Where can I go for a hardship based loan and what advice do you have?

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Bill's Answer
(43 Votes)

Debt Relief

  • Review our 6 tips for hardship based loans and alternative loan products.
  • A cash-out refinance is a good option, if you own a home with equity.
  • 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.

You didn't specify the cause of your hardship, but some common reasons people struggle financially are: loss of income due to job loss; medical expenses not covered by insurance; divorce; and disability, to name but a few. Any of these can result in a drop in cash flow and the need to raise some money in order to meet all your debt obligations.

Given your situation and goals, it makes good sense to understand the types of hardship loans available and whether you can qualify for one. Depending on the specific facts of your financial situation, there may be a few alternatives to a traditional personal loan that could assist you in resolving your debt.

If you can't get a hardship loan, or the only one you can get has very unattractive terms, then looking for other debt relief solutions that will ease your financial burdens is your best course.

Your Hardship is too Severe to Get a Loan?

If a hardship loan is not a realistic solution, you may benefit from professional debt relief assistance. Get a free consultation with a's approved debt relief provider.

Six Hardship-based Loan Suggestions

Look into the following hardship loan options, comparing any fees that come with the loan, the interest rate, and the affordability of the monthly payment.

A 'No' Demands an Explanation

If you are turned down for a loan, ask the lender the specific reason(s) your application was denied. Also ask them what steps you would need to take in order to qualify.

Cash-out Refinance

If you own a home with equity, start by seeing if you can qualify for a refinance loan. Refinancing could offer you the lowest rates of any loan option, due to the security of your home that you use as collateral. There are cash-out loans that accept borrowers with FICO scores that are lower than the FICO scores required for unsecured loans.

Peer-to-Peer Loan

Consider a loan from, which is a peer-to-peer lending and investing company. Current rates from Prosper range from 6.38% (for borrowers with excellent credit) to 35.36%, for higher risk borrowers, as of October, 2017 depending on how Prosper evaluates your creditworthiness and offers its lowest rates to borrowers with excellent credit. Higher risk borrowers are going to get higher interest rate loans.

Lending Club is another, large peer-to-peer lender. Unsecured personal loans from Lending Club range from 5.32% APR to 30.99%, as of October 2017.

Retirement Account

Borrowing from your retirement account has serious downsides. You are reducing your retirement holdings.If you don't pay it back as agreed or if you leave your job before it is repaid, you will be hit with penalties and taxes. That being said, depending on your need for money, the benefits could outweigh the costs.

A big pro is that you are not judged on creditworthiness or debt-to-income ratio in order to get the loan.

Not all 401(k) plans allow account holders to borrow against their holdings. Ask your 401(k) plan administrator if loans are allowed under your plan.

Online Hardship Loan Lenders

Check out loans from other online lenders that make unsecured loans, such as loans available from FreedomPlus. FreedomPlus looks at more than credit scores. It's underwriting considers other data, giving borrowers a chance to access lower rates due to factors outside of credit score. For example, if you have over $40,000 in retirement accounts or take out a debt consolidation loan and FreedomPlus pays off your creditors directly, using your loan proceeds, you could get a lower rate.

FreedomPlus loan terms range from two to five years, with a maximum loan amount of $35,000. Interest rates range from 4.99% to 29.99%, as of October, 2017.



No Advance Fees

Never pay a fee in advance for a loan, especially if it is from a "We make loans to anyone; bad credit is not a problem!" lender. Scammers will take a fee from you and not give you a loan.

Payday Loans

A payday loan may be the only hardship loan for which you can qualify. Payday loans have very high fees. If you don't pay it back as agreed, can be a debt trap. Payday loans are only good as a very short-term hardship loan of last resort, when you are certain you can pay it back right away.

I also recommend that if you are seriously considering a payday loan, you read the Federal Trade Commission page with consumer information about payday loans.

Know Your State's Laws

Before you take out a payday loan, be sure you know the payday loan laws that apply in your state, such as whether a online payday loans are legal in your state.

Loan Qualifying Tips

In order to qualify for a loan, you have to demonstrate that you can afford to pay back the loan. Lenders require that your debt-to-income ratio shows that you can afford to make the monthly loan payment.

You also have to meet credit requirements, both for credit score and credit history. The best rates on loans are offered to borrowers with excellent credit scores and if your score is below the minimum credit score a lender requires, your application will be turned down.


Get Your Free Credit Report, when Entitled to Receive One

 If a lender turns you down due to something it finds on your credit report, you are entitled to a free copy of your credit report and a letter that explains why you were turned down.

Even if you have a strong credit score, you could be turned down due to your credit history. For example, the presence of a collections account could prevent you from qualifying from a loan, until you can prove the account is paid off. Similarly, you may have to wait X number of years after a bankruptcy discharges, even if your score bounces back more quickly.

Hardship Loan Alternatives

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 providers.

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

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



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(43 Votes)


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  • 35x35
    Aug, 2019

    I also got scammed in the process by a man who went by name of Johnson Williams. He "helped" me with a loan of $533,000. I should say he helped himself to a fee and I got $0! Stay away from him. I should have been suspicous of the fact that they had me contact them via a Gmail address  that had an odd spelling and a number after the name: WillianLoanFirm*and WhatsApp.

    0 Votes

  • 35x35
    Aug, 2019

    I needed a loan to catch up on my car payments and rent, due to loss of income during a serious illness. I know now that I should have been suspicious of  the "100% Guaranteed no matter your Credit Score." I guess desperation shut off my brain. I hope anyone reading this doesn't get scammed like I did. 

    Stay away from David Mane Financial Loan Firm!

    0 Votes

  • 35x35
    Aug, 2019

    Please add Ruth Hunt Financial to the "lenders" out there that tell people that there is a 100% guarantee that they will get a loan  that  is "legit, honest, reputable and quickly funds." I don't even know how they got my contact information. I didn't fall off the turnip truck yesterday. If it sounds too good to be true...

    0 Votes

  • 35x35
    Aug, 2019

    There must be someting magical about the number 3%, because I keep seeing bogus offers for loans at 3% in emails and in comments people leave at website. These scammers make it sound like anyone can get a 3% loan, whether to expand or start a business, to pay for education, consolidate debt, or whatever. What a crock. The latest one I saw was for a New World Finance and they had a Yahoo email address for their contact. lol

    0 Votes

  • TS
    Jul, 2019

    i have been scammed by 4 different lenders who did nothing but cause me more pain. I know "once bitten, twice shy," so you must think I am an idiot to be repeatedly scammed. The last scammer was the Cheryl Tilney Help Foundation Limited managed by Mr Brian Williams. One thing I learned is that legitimate lenders don't have @gmail or @hotmail email addresses. They have @theccompany'sname email. Some of the scammers had legit looking websites, but everyone should do a search online and if nothing comes up, like when you search for Cheryl Tilney Help Foundation, that is a red flag. I also learned to check to see if a firm  is licensed to do business in the state in which you live. 

    The scammers rely on people being in a desperate state of mind and not thinking clearly. They sound professional and the loan documents look legitimate. 

    Oh, one other thing I learned is that you should never pay an advance fee when applying for a loan. I hope people see my comments and don't get ripped off like I did.

    0 Votes