Loans for People on Welfare
Being on Welfare doesn't necessarily mean that you're out of luck if you need a short-term cash loan. Whether you need a loan for car maintenance, medical emergencies, or home repairs, there are lenders who work with high-risk and low-income borrowers.
The main caveat of taking out a loan while on Welfare is the high interest rate. The other consideration is the time and money limit. Short-term loans for high-risk borrowers are very short, only a few months at the most. And the amount you can borrow is quite low if you bad or no credit history. Nevertheless, if you need the money you must accept these limitations.
List of LendersState and County Government: Check with your county courthouse or state's Department of Human Services for low-income family resources. Your state may have assistance programs for Welfare recipients who need small loans for medical situations or emergency home repairs. In fact, if you dig deep enough into your government's services, you may even find grants or vouchers. It's much better if you can get free money instead of a loan.
Peer-to-Peer Lending Networks: Online P2P lending networks connect borrowers with private citizens who have money to lend. People who lend money through peer-to-peer networks treat it as an investment, thus, they often charge high interest rates. The terms of these loans vary from lender to lender, and you may have to pass a credit check performed by the website. Welfare recipients are not barred from applying for these loans. If you are concerned about privacy, you should know that P2P lending website protect both parties' information.
Car Title Loans: If you own your own vehicle, you can get a cash loan by presenting your car's title as collateral. There are still interest charges with these loans, but since you are giving the lender collateral, you don't have to pass a stringent credit check. Car title lenders take borrowers who receive Welfare checks, since it is steady source of income. The amount you can borrow depends on your credit history and car's value.
Traditional Banks: Your bank may offer you a line of credit if you have been a customer for many years without any bounced checks or negative balance issues. If you have a credit card with your bank, that can also work in your favor.
Online Banks: If you can't get a short-term cash loan with a traditional bank, you can apply for loans at online banks. Because they don't have as much overhead as a brick-and-mortar bank, online banks often have lower fees and interest rates. You will still have to pass a credit check and being on Welfare may work against you.
Payday Loan Advance check cashing centers lend money according to pay stubs. Even if you are unemployed, Welfare checks count as a form of income, so you can often get an advance on your next Welfare payment.
© Had2Know 2010