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    Personal Loans For Disability Care

    If you are disbaled and in need of financial assistance, you may have more options than you think. Some common reasons to seek a personal loan, in this case, include paying a medical bill, covering debt, waiting to be approved for disability benefits, and being able to cover disability care and all associated costs.

    Is it a good idea to take out a personal loan for these purposes? What type of loan should you go for? What other options are available? Here is a complete guide.

    How It Works

    If you are a US citizen with a disability, you may be eligible for Social Security benefits. However, sometimes, getting approved can take time. If you are short of funds, you may wish to take a personal loan while you wait, however, it can be tough to qualify because of your disability. How do you manage this financial situation and avoid this loop?

    First of all, it is recommended to consider a variety of options besides the banks. Traditional loans may have rigid terms, and it may not be so easy to get approved.

    A good place to start is a consumer loan office. This type of institution makes it easier to get a personal loan when compared to traditional lending institutions, and tends to show more leniency in its assessment process. Credit unions could also be a good option, as they can accept applicants with suboptimal credit scores and lack of employment history.

    However, it is important to keep in mind the following:

    • Interest rates will probably be higher than offered by traditional institutions.
    • Even if the interest rates are reasonable, they could balloon if the loan is not paid soon with the award of Social Security disability back pay.

    Besides consumer loan agencies, you could also consider borrowing from credit unions. They do not have extremely stringent requirements and can even accept borrowers with suboptimal credit scores. 

    Bear in mind the following: 

    • You must not go beyond the resource limit when you get a loan and have applied for SSI disability. 
    • If you do not spend the borrowed funds within the same month, they will be calculated as part of your SSI asset limit. The limit is $3,000 for couples and $2,000 for individuals.

    Loans To Avoid

    Knowing what loans to stay away from is just as important as choosing the right loan types, as making an error could worsen your financial situation.

    • To start with, it is recommended to stay away from personal loans online. These typically have extremely high APRs (over 100%), along with inflated fees.
    • You should also avoid payday loans as they have even higher rates of interest. The APRs of payday loans are usually around 400% or 500%. You can easily fall into a debt trap by opting for this loan type. 

    Social Security Disability Loans

    You have the option of applying for an emergency loan of one month’s worth of benefit, directly from Social Security. It is not easy to qualify for this loan as you need to prove acute financial hardship. Regardless of finances, this program, called the Presumptive Disability (PD) plan, will give immediate approval to those who have one or more of some of the conditions below: 

    • Total blindness or deafness
    • Down Syndrome
    • Confinement to a bed
    • Symptomatic HIV or AIDS
    • Terminal illness with less than six months to live

    This program is designed to provide support after applying for SSI disability benefits, while waiting to be approved. Those who qualify due to a financial or physical reason could certainly benefit from this helpful program. 

    Financial Assistance Available While Waiting For Disability

    Claimants usually need to wait a long time to receive a decision on disability benefits. While waiting, one’s financial situation can deteriorate further. This wait is unavoidable, but there are a few things you can do in the meantime.

    Avoid taking new debts, and also consider restructuring your existing debts and payment obligations. Also, think about the other benefits that you might be eligible for, depending on your situation. These could include food stamps or other means of public assistance.

    Bottom Line

    Disability can create a ripple effect that can lead to many direct and indirect costs. Taking a personal loan can be a viable option for disability care if the APR and other terms are assessed and there is sound financial planning. Social Security disability loans, as well as specialized programs, can often sufficiently bridge a financial gap, but note the eligibility requirements to be able to make wise decisions. 

    There is no doubt that being aware of your options is certainly the first step when thinking about personal loans for disability care or other related expenses.