Hardship loans for bad credit are called a lot of different things. The general idea is that you provide documentation that proves you’re in dire straits, either by showing the poverty line or having a bankruptcy on your record. You can usually borrow up to $5,000 with hardship loans for bad credit and they are often unsecured (although some require collateral).
Types of Hardship Loans
There are two types of hardship loans: debt consolidation and payday. Debt consolidation is a great option if you’re looking to get rid of your high-interest debts, such as credit card debt. Debt consolidation only requires your input and it will consolidate your debt with a lower interest rate.
Payday loans have a quick turnaround time but it’s an expensive way to borrow money. They charge exorbitant fees and the interest rate is often astronomical.
Is Debt Consolidation Right For You?
If you’re considering a debt consolidation loan, there are specific things to think about. Lenders want to know that you can handle the debt payments, so it’s worth taking some time to calculate how much you’ll need each month. To do this, you’ll need to get your own personal finance software, such as Mint. This is also where you can figure out how much you spend in monthly expenses. Use this information to calculate how much debt you’ll be taking on with consolidation. You can then use this information to find out if you’re eligible for a loan at all.
What Is A Payday Loan?
A payday loan is the classic example of a short term loan. They have short terms and high fees, but it can be very useful for getting out of a bind. The downside to payday loans is that the interest rates are staggering. In most cases, you will never be able to pay off the full amount you borrowed on your own. You’ll need to pay back the principal and interest with each paycheck, which means that you could end up paying more in fees than you originally borrowed.
How Can I Pay Off My Debt in the Short Term?
If you’ve made it this far and decided that debt consolidation is your best option, there are a few ways to pay off your debt in the short term. The first is cutting out all unnecessary expenses. Stop ordering food and eat at home more often. You can also change your utility habits to be more conservative with electricity and gas. Gas prices aren’t going down any time soon, so don’t waste it! You can also ask your family for cash so you can pay off some of your debts right away.