What if you needed money and didn’t have a way to earn more?
For many people on some form of social security, this is a sad reality. They may have some form of disability that keeps them from working as much as they want.
Nonetheless, there will be times when they need to get extra money. And at that point, payday loans for disability will look pretty attractive.
However, many don’t understand how payday loans work and how they interact with having a disability. Keep reading for our comprehensive guide to everything you need to know!
What Are Payday Loans?
This guide focuses on whether you can get payday loans if you are receiving disability or social security assistance. Before we get to that, though, it’s important to understand just what payday loans really are.
In general, these are short-term loans. That’s why they are often called “payday loans,” as the lender may expect it to be paid back by the time you receive your next check.
These loans are typically easier to qualify for than other kinds of personal loans. That makes them an attractive option to individuals who may have poor credit (more on this later).
Typically, payday loans have a very high interest rate when compared to other loan types. It’s important to keep this in mind when applying: if the interest rate is as high as 20%, then you are effectively going to pay back $20 for every $100 that you borrow.
With this in mind, there are still some very unique benefits that payday loans have, making them ideal for certain demographics.
Benefits of Payday Loans
One of the biggest benefits of payday loans is that you don’t have to wait to get your money. Hands down, this is the quickest way to obtain money via a loan.
Payday loans can typically have money in your account within twenty-four hours. If you have been waiting on your social security disability application to process, this is a quick way to get money when you need it.
There are also no restrictions on what you do with the money. Certain lenders and certain loans may come with stipulations on what you can spend your money on. As far as payday lenders care, you can spend that money on anything you want.
And if you’ve suffered through the quiet hell of disability paperwork, payday loans will seem refreshing in their lack of paperwork. With disability, you must provide things like birth certificates, medical records, your old W-2s, and so on. Most payday lenders need nothing more than your signature and where you want the money to go.
Finally, you don’t have to meet anyone face to face to get a payday loan. There are a number of ways to apply for payday loans online (more on this later), which makes them a great solution if you are homebound or simply find it very difficult to get out of the house.
Downsides of Payday Loans
Of course, we all know that nothing is perfect. And for all of the benefits that payday loans have, there are a number of downsides that you should be aware of.
The first is one we mentioned earlier: the high interest rates. While payday loans are the easiest types of loans to qualify for, they also carry a higher interest rate than any other loan. You are typically far better off getting personal loans or lines of credit, as those will have more competitive interest rates.
Also, some (though not all) payday lenders focus online on payday loans. That means they don’t have the long relationship that, say, banks would have with their customers, and they are less likely to be lenient or understanding if the customer is having any trouble paying back the loan.
That brings us to the last downside. Payday lenders will stop at nothing to get their money back, including hiring collection agencies to contact you night and day. And if you’re not careful, you may even end up in court over a relatively small amount of money.
The Vicious Cycle
It’s worth noting that some people who get payday loans end up getting caught in a vicious cycle. And while this may never happen to you when you seek a social security payday loan, it’s important to go into this with eyes wide open.
Put simply, most people turn to payday loans because they don’t have enough money to pay for their needs or their bills. But when it’s done, they still owe the whole amount they needed plus a high percentage of interest.
Unless you know for sure that you will have enough money coming in (and soon) to pay the loan back, then the amount you owe is only going to climb. Before you know it, you must borrow more money to pay for the added debt, so you are caught in this terrible cycle.
And if you can’t pay the payday loans back, things might end up getting really ugly. The lender can take you to court, and if they win, they can garnish your future wages, which takes some of your financial control out of your hands.
Again, this doesn’t happen to everyone. And with wise planning, it won’t happen to you. But it’s important to know what can go wrong with things like disability payday loans so that you can use them the right way.
Do The Research
As we have said, there are different kinds of payday lenders. Some of them are well-established and fulfill many different financial roles. And some of them are downright predatory, focusing only on their bottom line.
How can you tell which is which? In this case, you can let your fingers do the walking and use the internet to research some of the different lenders for your social security disability payday loans.
First, there’s the obvious stuff: you can compare things like interest rates, allowing you to choose the payday lender that has the lowest interest rate.
You can also look at things like how long (or short) the loans are. In this way, you can find a lender whose loans match your time frame and whose interest doesn’t break the bank.
Don’t forget to do other research, though. Ask your friends and associates who have used them before, and try to research their overall reputation online.
With a little luck, you can find a trustworthy payday lender who can provide the loans you need, when you need them!
Online and Offline
Speaking of online, one good thing about payday loans for disability or social security is that you have a lot of options. It’s possible to explore lenders who are offline, online, or both.
As we said earlier, having the ability to apply for payday loans online is a great option for many people on disability. Such individuals might find it difficult or even impossible to apply for loans at a lender in-town.
At the same time, having a lender that you can visit (or simply call) is also a good option. In order to build trust, many people prefer to talk to a human being instead of simply interacting with an online form.
Fortunately, many lenders are a blend of both of these things. Some lenders may be online only, but they have a full customer support staff that you can reach by telephone.
This lets you have the best of both worlds: all of the convenience of an online bank and all of the trust and relationship-building of a bank in town!
Avoiding the Wait
Earlier, we talked about some of the reasons that individuals might want to opt for the payday loan. However, individuals who are applying for disability have more of a reason than most to embrace these loans.
As you may or may not know, there is sometimes a large gap between when you apply for disability and when you actually get it. During this time, your paperwork is being checked and processed, but the wait may start to become unbearable.
After all, your bills are not put on hold while you wait for the paperwork to finish processing. And it’s very easy to run out of money while you wait. In this scenario, the payday loan may be a lifesaver!
Like we said earlier, these loans are easy to apply for: they have low credit requirements and are processed quickly, often getting you the money you need within twenty-four hours.
If you need money quickly while waiting on disability paperwork to be processed, a payday loan may actually be the perfect option for you.
Social Security Disability Loans
So far, we have focused primarily on payday loans themselves. Because they are versatile and easy to get, that makes them a good solution for people on social security disability who need some extra money.
However, if you are on social security already, there is another alternative that you can pursue. And that alternative is the social security disability loan.
The Social Security office has a presumptive disability office. This office can help verify that someone both qualifies for disability and is experiencing an extreme hardship concerning food or shelter.
If these qualifications are met, then you can get a one month loan of monthly benefits. Similar to a payday loan, this must be paid back through the use of future checks–in this case, through future presumptive disability checks.
While this can vary from state to state, individuals who qualify for SSI presumptive disability checks typically qualify for their state’s Interim Assistance programs. Money received this way must also be paid back, but depending on your circumstances, this may be a better alternative than pursuing payday loans for SSI recipients.
Knowing Your Credit
As long as we’re talking about alternatives to payday loans, it’s worth discussing your credit options. Depending on your credit, you may qualify for superior options to payday loans when it comes to getting financial assistance.
If you already had good credit to begin with, then being on social security disability should not impact your credit very much. This means that you can still qualify for things like credit cards and personal loans that can help you pay the bills.
For those who don’t know much about their credit, it’s easy enough to learn: all you have to do is sign up for a free monthly credit monitoring service. You will get monthly updates about changes to your credit score as well as suggestions for what you can do to raise your score.
As we said earlier, personal loans typically have a lower interest rate than payday loans. Furthermore, these loans do not have to be paid back so quickly. These two factors alone may make them a better alternative for you.
Credit cards may also be a good alternative. And it may not cost anything if you pay the money that is owed within a month’s time.
If that sounds unrealistic, keep in mind that you are already forced to do this with most payday loans. If you can qualify for a credit card and pay the debt in that same amount of time, you will not be charged any interest.
Can I Get Payday Loans for Disability?
Now we come to the big question: “can I get payday loans for disability?” The short answer to this question is “yes!”
The longer answer is this: the payday lender only really cares about you having a source of income to help pay the loan back. They do not usually care if that income is from social security or disability payments or from a job.
Be sure to do your research about the income requirements for the payday lender. And use our guide to figure out if a payday loan is the best solution for your situation.
Payday Loans for Disability: The Bottom Line
Now you know how to get payday loans for disability. However, do you know a lender you can really trust for this loan?
At Bonsai Finance, we offer payday loans as well as personal loans, credit cards, and so much more. If you need financial assistance, visit our learning center today!