When we were younger, most of us hoped Social Security would be enough to take care of us as we aged. Unfortunately, most of us were wrong.
Social Security provides a great safety net, and it provides a lot of peace of mind. But there will be times that you need additional money, and it’s important to understand what all of your options are.
Social Security loans can be a good alternative if you need money. But if you’re not careful, you can end up in serious debt and worse off than you were before.
We’ve got you covered, though: keep reading to discover our ultimate guide to installment loans online for Social Security disability.
As we said before, Social Security loans can be a great way to get money when you need it. However, you should still explore other options before you start taking out loans.
One solid alternative to get additional benefits is to check your Supplemental Security Income eligibility. This is a completely different program from Social Security Disability (more on this later).
First, it’s important to note that SSI eligibility hinges on you having extreme financial hardship. If you are exploring Social Security loans just because you have a minor and short-term financial difficulty, SSI is not for you.
In addition to financial hardship, you can qualify for SSI eligibility by being disabled, blind, or sixty-five years old (or older). You must also be a U.S. citizen and not currently in jail.
If you’re on the fence about whether or not you qualify for SSI, there is a handy online questionnaire you can take. And you can always go ahead and apply–the worst thing they can do is tell you “no!”
So, you’re interested in pursuing SSI before you apply for Social Security loans? How do you go about applying?
The first step is to simply pick up the phone. You can call 1-800-772-1213 and make an appointment to apply. That appointment will take place either at your local Social Security office or via telephone.
Be warned ahead of time, though: applying means getting a lot of paperwork together. You’ll have to provide picture ID, a birth certificate, your Social Security card, and proof of citizenship.
On top of that, you’ll also need to show a proof of your work history, income, living arrangements, and medical history.
If you’re wondering why they need all that, this helps to establish if you have the level of financial hardship required to qualify for SSI. And if you qualify, the information that you provide helps determine how much you qualify for.
So what if you apply and get denied? You can actually appeal this decision in writing within sixty days of the denial. This lets you have a face-to-face hearing with the Administrative Law Judge.
If the ALJ also denies your application, you can appeal to the Appeals Council. And if they deny your application, you can appeal all the way up to the Federal Court!
Before you go through all of that, though, it’s important to know the difference between SSI and SSDI.
Difference Between SSI and SSDI
There are some important differences between SSI and SSDI. The primary difference comes down to employment history.
SSDI, specifically, is limited to individuals who have achieved a number of work credits over their lifetime. SSI, as we indicated, is predicated instead primarily on age and financial hardship. SSI has no work history requirement attached to it.
Most individuals receive either SSI or SSDI. However, it is possible to receive both at the same time. This is known as “concurrent benefits.”
This is because the amount of money that you receive through SSDI may be relatively small. In this way, you may have a regular income via SSDI that still meets the financial hardship requirements of SSI.
Obviously, not everyone who receives SSDI will qualify for SSI at the same time. However, we feel it’s important to explore a variety of options before you begin to take on debt that may negatively impact your quality of life.
Because of this, it’s good to go ahead and check for any government benefits that you might qualify for.
Check for Government Benefits
There are a variety of government programs that provide benefits to those who need financial assistance. Which programs you can apply for depends on what you need financial help with.
If you are having trouble paying utility bills, you can look into the Low Income Home Energy Assistance Program. You will need to check with your state’s local LIHEAP office to review the specific eligibility criteria.
If you needed money to buy a telephone, the government offers a LifeLine program. This can help you both obtain a cell phone and to pay any monthly bills that are associated with the cell phone.
If you need help with medical bills, there’s the Basic Health Program. This program is offered in each state and helps offer you medical coverage that is more affordable.
For those without any kind of health insurance, there’s the Health Resources and Services Administration. These health centers offer very affordable medical services, which is a great alternative to expensive ongoing bills from traditional doctors in town.
Finally, there’s the NeedyMeds website. This is an online service that helps individuals find cheaper local healthcare and prescriptions.
Separately or together, these services can help you drive down your regular bills before you apply for any kind of Social Security loans.
Factors Affecting Loan Eligibility
Some people are hesitant to apply for social security disability loans. This is because there are several different factors that may impact loan eligibility.
One big factor is your debt level. Sometimes people wait until debt has accumulated before they seek financial assistance. However, high existing debt can limit your ability to take on future debt.
Credit history is another major factor. Along with debt, this has a significant impact on your credit score. But having low income may have impacted your ability to pay previous credit cards and loans, giving you a rocky credit history.
Income, of course, is a major consideration. When you have a limited amount of money coming in, it’s going to factor into how well you are able to pay back any new debts.
Finally, your savings is a consideration. This is something of a double-edged sword for many people seeking Social Security disability loans.
This is because a good amount of savings and other assets can help you to qualify for best credit cards and loans. However, your limited ability to add to your savings means you must be careful about how much of it goes to bills, debt payments, and so on.
Earlier, we mentioned some of the factors that make people hesitant to pursue Social Security disability loans. And many of those factors relate in some way to your credit score.
However, many applicants to Social Security disability loans don’t fully understand how their credit score works. Basically, it boils down to five major factors.
The biggest factor is your payment history. A solid history of making on-time payments gives you a higher credit score, while a history of late payments or accounts in collections hurts your score.
As we hinted earlier, debt plays a big part in your credit score. Credit cards factor more than installment loans, but all debt is considered. To better your score, try to not use more than 30% of the available credit on any of your credit cards.
One thing that might be on your side is the age of your credit. Generally, the longer you have had an account, the better it looks on your credit report. Try to keep those old credit lines open, even if you’re not currently using them!
A small factor in your credit score is the mix of credit accounts. Having a mixture of installment loans and credit cards is good, but it’s not a deal breaker if you have more of one than another.
Finally, there’s your history of credit applications. Every time you apply for new credit, there is a small, short-term impact on your credit score. This is why it’s not good to apply for a bunch of different credit cards at the same time–your score is going down a little more with each application!
Staying On Top of Your Credit Score
We’ve been talking a lot about your credit score. This determines the kind of Social Security Disability loans that you can get, and it’s always good to know what your score is before you apply for anything.
Sometimes, borrowers think that it’s difficult to get their credit score. They might even think it’s expensive. Fortunately, the opposite is true!
There are now a number of free credit monitoring services that you can sign up for. These services will give you a monthly update on changes to your credit score and make recommendations for how you can improve your score.
These services may also help you develop a “game plan” ahead of time. For instance, if you can afford it, you might want to get your score a little higher before you begin applying for loans.
What Are Installment Loans?
One term that you’ll hear a lot is “installment loan.” This term sometimes confuses people because they aren’t sure what an installment loan is.
However, the truth is that most loans are installment loans. The one arguable exception to this is payday loans (more on this later).
An “installment loan” is any loan that you repay back in regular installments. These installments are tied in with a specific schedule, so you’ll know when the loan will be fully paid back.
Personal loans that you get through a bank or credit union are considered installment loans. Even automobile loans and mortgages are installment loans, as they have a fixed term and regular payment installments.
The reason that payday loans are a possible exception is that many of them are meant to be paid back (with interest) by the time you get your next check. In this sense, they are paid back in one payment instead of over multiple installments.
Alternatives to Payday Loans
Payday loans have a reputation for being easy to get. If you need money quickly and have bad credit, then they are a very attractive option.
However, there are many alternatives to payday loans. And these alternatives may be much better Social Security disability loans than the payday loans were.
What’s wrong with payday loans? The main issue is that they have a really high interest rate and must be paid back quite quickly. If you know what your alternatives are, then you can get proper installment loans instant approval at a much more competitive interest rate.
Types of Social Security Loans
There are many different kinds of Social Security loans. To find the one that is best for you, be sure to review all of your options.
One option is to ask your bank or credit union about their loan options. They may have loan options that they don’t advertise that are perfect for your needs.
There are also so-called “peer to peer” loans. These are loans that are effectively crowdsourced from other people. While these lenders haven’t been around as long, they may be able to offer more attractive interest rates.
If you have poor credit, there are also secure loans. These require you to put up some kind of asset as collateral, making it vitally important that you never default on this loan.
The good news is that the internet makes it easier than ever to research the different options available. With so much to choose from, you’ll be able to to find the best Social Security loans in no time.
The Bottom Line
Now you know just about everything regarding Social Security loans. But do you have a lender you can trust to get the money you need?
At Bonsai Finance, we offer different kinds of credit and loan options for all of our consumers’ needs. To see how we can help out, come browse our loan options today!