Loans for Single Mothers
Being a single mother can be financially challenging. One of the biggest obstacles that single mothers face is managing the family budget and covering all living expenses. A single income or benefits may not be enough to cover general expenses let alone unexpected ones that arise.
Fortunately, there are numerous financial assistance services available including help with bills, daycare, food and loans for unexpected situations.
Understanding Loan Options
The type of loan you may qualify for will be specific to your financial situation. Those who have income from a job will have more options than those who solely collect benefits to maintain a household. Regardless of your situation, there are multiple financial options available. A key component of loan approval is based on risk to the lender – the less risky, the better chance of approval.
Most borrowing options will come from specialty lenders, non-profits or government initiatives.
Features of Single Parent Loans
Single mother loans are designed to help with unexpected financial situations or emergencies. They are meant to assist with important household needs and not for entertainment.
- Speed of accessing cash
- Flexible approval and repayment criteria
- Online account management
- Debit cards (on some loans)
- Bad credit ok (in many circumstances)
- Online or over the phone cash top ups
*If your borrowing money to pay for everyday expenses such as utility bills, food or other essential household needs, there are other free assistance options available.
Single Mothers Lending/Financing Options
There are several types of lending and financing options for single mothers, including grants, benefits and loans. Loan amounts will be based on need and capacity to make repayments on top of your current financial commitments.
Social Security – If you are collecting social security and it is not enough, consider SSI as another option to help supplement your current benefit payment. SSI may be a solution to help with your monthly cash flow. Whilst this isn’t a loan, it is extra cash that you may receive ongoing each month to help with the family budget.
Self-Sufficiency Grants – This is money provided for those dealing with serious financial hardship and need money to keep a roof over their head or the lights on. As this is grant money, it does not have to be paid back.
Stretch Pay Loans – This is an alternative product to payday loans provided by credit unions. Loan amounts can go up to $1000 and be repaid over 1 year.
Micro Loan – These are short-term loans designed for emergencies. There are many loans that fall into this category including, payday loans, salary loan, cash advance, etc. These loans do come with a high cost (APR & fees) but do serve a purpose for those who need cash quickly. It is important to understand their terms and the consequences should you not be able to make your repayments.
There are other single mother loan options available as well as different financial subsidies to help with numerous other bills. Taking advantage of these assistance services will reduce your expenses and improve your monthly cash flow. Learn more about financial support for moms.
Considerations for Single Mother Loans
Regardless of your situation, taking on a loan can be a poor financial move as it can put you into deeper financial trouble. Before a taking on any type of serious financial commitment, there are a few things to consider.
- Can you really afford the loan? Just because you qualify doesn’t mean you can afford it
- Is the cost for borrowing worth it? Is it really worth paying someone $30 to borrow $100 (in some cases)
- Protect your credit. If you can’t meet your repayments, you can damage your credit rating, which can impact future financial goals.
- Are there better alternatives? See financial support for moms above
Understanding Eligibility Requirements
In order to take out a loan, the borrower must meet certain eligibility criteria. Whilst this can vary from lender to lender, below are the most common elements.
- Have a verifiable source of income such as a job, benefits or investment income.
- Have an active checking or savings account
- Have valid identification. (resident card or license)
- Be over the age of 18
- Length of time at current residency (utility or phone bill as proof)
How to Apply
Depending on the lender, you will either have to go into a branch or online. Most provide an online application and will provide a result in minutes with funds going to your account as quick as one hour to 1 or 2 days. Be sure to have the eligibility items with you when applying.
Frequently Asked Questions
Is it expensive to take out a loan?
This really depends on your financial situation and the lender. In most cases small, quick loans are more expensive as you are paying for convenience.
Can I extend my loan?
Most lenders will work with you to extend your repayment terms should you have trouble meeting the original agreement. In addition, some will provide you a top up and extend terms if you have been making repayments and have almost paid the loan off without issue.
Can I have the loan directly deposited into my checking account?
Yes, when you borrow money from an online lender they will deposit the money directly into your nominated bank account.