Loans are an efficient way to help you out but identifying the types of loans are crucial. If you belong to a low-income family or are looking to purchase something, it’s likely that you have looked at your finances and wished for some sort of magic to get everything under control immediately. Although loans seem like a scary thing to have, they are an important financial decision to take.
While we wish that was a possibility, the reality is that finances are something that has to be done in “baby steps”.
Remember how your child learned to walk? Those small stumbling first steps didn’t seem like they would ever add up to that full-blown running that takes your growing child across the playground or up a flight of stairs, but they did.
This is exactly how you must view your efforts at keeping or getting finances under control – one small baby step at a time. Fortunately, there are many types of loans that can actually help you out tremendously if you find that you cannot wait to move from toddling to running.
For example, if you are unable to pay for housing, transportation, food, utilities, etc., you have several realistic places to turn for some help and financial stability.
The very first place to turn is to local social services agencies, religious organizations, etc. Consider the many dedicated state assistance programs too.
These groups have emergency funds always available and can help with life’s essentials if financial problems are a serious challenge.
Apart from the “dire” emergency loans, there are other opportunities. In fact, if you are struggling with debt, bills, or everyday expenses, you have many places that are happy to offer you everything from education to actual funding.
Begin with your state’s 211 Service, and learn what sort of legitimate options exist. Then move on to the traditional “lending” agencies.
If you are a working parent, we salute you. It is incredibly challenging to be a parent, and even more so if you carry the typical 9-5 job. However, one thing we have to tell you at the start is to avoid the use of “payday loans” of any kind.
Most of them work like this: You write the “lender” a check for $200, plus an additional fee of $40. For that, you get $255 in cash.
They do not deposit your check right away but will do so when your next paycheck is to be deposited into your account. In essence, you just paid $40 to get the money for less than two weeks. That is a ruthless process, and you don’t want to get stuck using it.
Avoid taking out any emergency loans, simply because their terms are always the least favorable to you as the borrower. Since they know you are in a crisis and desperate for money, they will often make the interest rate extremely high.
Why not consider a personal loan that helps you to consolidate debts into one monthly payment, improves credit, and helps you keep track of every penny with ease?
If you have good credit, consult with your bank, credit union, or even your mortgage lender to determine if they have options.
If your credit is bad, still begin by going to your bank or to local banks. Some have programs for loans and they will be able to review any available options.
If your credit score is too low, some banks or lenders cannot help you. However, don’t close an account because it is always beneficial to be an established customer with at least one reputable bank.
Secured VS Unsecured Loans
Some lenders make funds available if you can offer up a security for collateral. For example, your home or car can serve as security. Obviously, you must think a lot about this because you don’t want to jeopardize your lifestyle in order to borrow some money.
This provides more safety for the lender so they don’t lose the money. Secured loans also usually have a smaller interest rate because they have something at stake.
There are a lot of ways to obtain them, and they can come from credit unions, friends, and family, or groups of lenders. Check with the Better Business Bureau before accepting cash from a group of private lenders, and if they are without any complaints, this could be a good solution.
Although these are typically not official loans, it is still a way to get money. There is nothing illegal about these loans, but generally, it’s recommended to use secured loans for a bigger amount of money.
If your finances are in order but you want to return to school or start a business, there are many kinds of loans available for you. There are also grant options as well, and these are funds that do not have to be repaid.
Look for grants offered by the government and you will find that you might be eligible for many of them. A lot is available for you as long as you look.
Education loans can be very tough to pay back. This may force you to consolidate payments, which can put you into debt for 10-30 years. If you have children who wish to obtain student loans it is harder to repay these loans since they don’t have a job.
You may not have enough collateral to prove that you can pay the loans back, and might have previous debts to pay.
Business loans are another subject that may cause you to have trouble. This is increasingly harder than other loans since businesses are extremely risky operations. The odds of maintaining a successful business is usually quite low for small business owners.
Having sufficient collateral is a problem. This can force you not to get the needed business loans to start their own business. People who come from a low-income family usually have a lower credit score. As a result, this will also lead to a smaller chance of getting approved by credit card companies. Which makes the buying power even more burdensome.
However, there are ways to influence/take advantage of situations in favor of not having a high income.
Programs to Try
School lunch and breakfast programs should be taken advantage of. It is a federal program that gives reduced prices or even free lunches and breakfast to kids who attend school. Churches often have programs to help as well. Explore all of these options for a better life for you and your children. Reduced prescriptions and free counseling are also available to those who apply. Make sure you take advantage of such offers to the fullest.
You may speak with the Department of Social Services for things such as welfare, food stamps, child support, medical programs, and child care assistance. There is a lot of paperwork just to apply, and the waiting time can be very long. The wait is often worth it since you need all the help that you can get.
If your finances are in order but you want to return to school or start a business, there are many kinds of loans for you. There are also grant options as well, and these are funds that do not have to be repaid.
Like education loans, automobile and home loans operate in the same manner. You are more likely to be rejected for a house rather than an apartment since houses on average cost much more. Since automobiles often break down, it requires more money to be spent. This makes the odds that a single mother can pay back a loan less likely.
There are loan options for all situations, but the best way to find and get a loan is looking long before you need the money. Start looking today and have all of the resources you need even before you need a loan.
There are loan options for all situations, but the best way to find a loan is before you even need the money. Start looking today and have all of the resources you need even before you need a loan.