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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
    Jun, 2019

    Getting a legitimate loan have always been a huge problem for people with financial problems. The more desperate a person is for a loan, the easier it is to fall for the predatory lenders and outright rip-off artits out there. 

    Desperation can lead to ignoring the warning signals that are apparent to others. For example, I have seen loan offers that people have paid an advance fee for, something no one should ever do, even with the following warning signs.

    The lender claims to give out loans:

    1. With a minimum of $1000 and a maximum of $40,000,000 with an interest rate of just 2%.
    2. That are loan is paid out in less than 24 hours depending on the customer's response and seriousness.
    3. While providing a business contact of a WhatsApp number and an email from Yahoo, Hotmail, or Gmail.

    Any one of these is enough to run away from this offer. Always be sure to check if the lender is licensed to do business in your state.

    0 Votes

  • 35x35
    Jun, 2019

    I have bad credit, and am dealing with a financial hardship brought on by illness and a resulting loss of income. I was looking for a loan and contacted a scammer named Randle Brooks. He claimed to be a private loan company that would give me a $15,000 loan with an interest rate of 2% .

    I need the money, badly, but know that when I had excellent credit (FICO score over 800), I couldn't get such a low interest rate. Add to that Randle wanted to use WhatsApp to communicate.  There was no company email. Thank God, I didn't pay this scammer a dime. 

    0 Votes

  • 35x35
    May, 2019

    Is there a fast way to improve my credit? Right now, I need a loan and my credit score is too low.

    0 Votes

    • 35x35
      Jun, 2019

      Getting a legitimate loan have always been a huge problem to clients who have financial problem and need solution to it. The issue of credit and collateral are something that clients are always worried about when seeking a loan from a legitimate lender. Sadly, there are scammers out there who tell people they can get a loan at a  good rate, evern with bad credit. Even sadder is that hard-working people fall for these false promises because they need the money so desperately.

      0 Votes

  • 35x35
    May, 2019

    Avoid the company Greener Loans Worldwide. Scammers! Also, avoid any firm saying they give out loans that uses an email address. 

    0 Votes

  • 35x35
    Apr, 2019

    Regency Finance Company is the lame company that tried to rip me off. Another one of these firms that says it cam help give loans to people everyone else turns down. What a load of crap. 

    0 Votes