Can You Get a Loan While On Disability?
Disabilities can challenge consistent income flows, irrespective of whether they are inherent from birth or acquired temporarily. To manage diverse expenses, individuals with disabilities often resort to loans.
Making substantial purchases like addressing medical costs or buying a house can be more difficult without the assistance of borrowed funds. Today, we aim to present a succinct guide to various loan choices available for those with disabilities.
Table of Contents
Payday Loans
Payday loans, essentially small loans intended to cover urgent costs until your next paycheck, could be a viable option for some individuals but only as a final recourse. These ODSP payday loans get their name due to the repayment schedule, usually by the borrower’s next payday.
However, the exorbitant fees associated with these loans, often translating into an APR of 100% to 400%, mandate that they should only be considered when all other options have been exhausted and if you’re sure you can repay the loan within a few weeks.
Medical Loan
Perhaps you’ve noticed a pamphlet advertising medical loans at the front desk of your doctor’s office or dental practice. These loans are typically utilized to cover healthcare costs. They usually offer attractive low interest rates and conditions that make repayments manageable. The application procedure is uniform for all applicants, irrespective of any disability they might have. However, the majority of these medical loans operate on a deferred-interest basis.
Credit Advances for Individuals on Universal Credit
Should you be a recipient of Universal Credit and need a short-term loan to cover necessary costs, a budgeting advance could be an option for you. This is essentially an interest-free one-year loan the government provides, which will be repaid via automatic deductions from your upcoming Universal Credit payments. Similarly, if your source of income is income-related ESA or Income Support, you may be eligible for a budgeting loan, which operates on similar principles.
No Credit Check
Loans for the disabled that don’t require a credit check might be attractive to those on SSDI who have negative entries on their credit reports. However, it’s important to note that you might end up paying more (in the form of higher interest rates or upfront fees) when dealing with a lender that doesn’t consider this essential risk assessment tool.
Income-based personal loans don’t necessitate a credit check as the subprime lender agrees to overlook past payment issues. Approval becomes feasible because government benefit checks have a high level of reliability. Nonetheless, to increase your chances of success, you should aim to keep your loan request as minimal as possible.
Cash Advance
A cash advance essentially serves as a short-term borrowing mechanism which can be accessed via your credit card, provided your card issuer permits it. This allows you to borrow a certain proportion of your credit limit and repay it later. It’s akin to purchasing cash directly from your credit card rather than utilizing it for direct purchases.
The funds are immediately available, like cash withdrawals from an ATM or a bank. However, it’s crucial to consider that cash advances are typically associated with fees and high annual percentage rates (APR), making them a potentially costly choice.
Endnote
For individuals with disabilities, a personal loan can provide swift financial aid. However, it’s advisable to steer clear of accumulating additional debt if it’s not essential. If you believe a personal loan is your optimal choice, take the time to weigh it against other available alternatives
