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Due to the COVID-19 pandemic, some lenders are offering coronavirus hardship loans. These are small personal loans that typically offer low interest rates, short repayment terms, and quick funding time. They also sometimes come with deferred payments.
Hereâs what you should know about coronavirus hardship loans:
Where to get a coronavirus hardship loan
Here are a few of your lender options for getting a coronavirus hardship loan:
Online lenders generally donât offer specific coronavirus hardship loans. However, online lenders do offer small personal loans. Some even offer approval decisions within just a few minutes.
The funding time for an online personal loan is usually five business days or less â though some lenders will fund loans as soon as the same or next business day after approval.
Here are Credibleâs partner lenders that offer fast personal loans:
|Lender||Fixed rates||Time to fund||Min. credit score||Loan amounts|
9.95% – 35.99% APR
|As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)||550||$2,000 to $35,000**|
6.79% – 17.99% APR
|Next business day||700||$10,000 to $50,000|
5.99% – 24.99% APR
|As soon as the next business day after acceptance||660||$2,500 to $35,000|
9.99% – 35.99% APR
|As soon as the next business day||580||$2,000 to $36,500|
2.49% – 19.99% APR
|As soon as the same business day||660||$5,000 to $100,000|
18.0% – 35.99% APR
|As soon as the same day, but usually requires a visit to a branch office||None||$1,500 to $20,000|
8.93% – 35.93% APR7
|Within one day, once approved9||560||$1,000 to $20,000|
5.94% – 35.97% APR
|Within a day of clearing necessary verifications||560||$1,000 to $50,000|
If you already have a bank account, it could be a good idea to check with your bank to see if theyâre providing coronavirus hardship loans.
While many banks arenât offering specific coronavirus hardship loans, some banks do provide emergency personal loans. These loans often come with similarly beneficial terms as hardship loans, such as fast funding times.
For example, U.S. Bank offers small personal loans up to $1,000 that could be funded within minutes if youâre approved.
Learn More: Personal Loans From Banks: Where to Get a Loan
Credit unions are nonprofit organizations that are generally more community-focused than other lenders. This makes them a good option if youâre looking for a hardship loan.
As of May 2020, 80% of credit unions were offering some form of coronavirus hardship loan, according to the Credit Union National Association.
However, keep in mind that not all credit unions advertise their hardship loans on their websites. This means you might need to directly contact a member service representative to see what short-term loan options are available to you.
Here are a couple of credit unions that offer coronavirus hardship loans:
To join a credit union, youâll need to fit within that credit unionâs field of membership. For example, you might have to live in a specific area, work in a certain career, or join an associated group.
Check Out: Where to Get a Personal Loan
How can I use a hardship loan?
In general, you can use a hardship loan for any personal expense â though some lenders might have specific limitations for their loans. For example, you can likely use a hardship loan to pay bills, buy groceries, or cover other unexpected costs.
Borrowing only what you need will help ensure that you donât end up in a worse financial situation.
Learn More: Everything You Should Know Before Taking Out a Tax Refund Advance
Can I get a hardship loan if I am unemployed?
When you apply for a personal loan, youâll typically have to provide proof of income. This is because lenders want to see your debt-to-income ratio as well as know if you can afford to repay the loan.
However, you might still be able to qualify for a personal loan if youâre unemployed, provided you have other sources of income.
For example, Discover is willing to work with unemployed borrowers as long they meet the other eligibility requirements.
Here are a few alternative types of income that lenders might accept:
- Unemployment benefits
- Self-employment income
- Social Security benefits
- Retirement or pension income
- Child support
Also keep in mind that some lenders donât have a minimum required income, which means you might be able to qualify as long as you can show youâll be able to repay the loan.
Check Out: How to Check If a Personal Loan Company Is Legitimate
How to apply for a coronavirus hardship loan
If youâre ready to get a coronavirus hardship loan or a small low interest personal loan, follow these four steps:
- Compare lenders. Be sure to shop around and compare as many personal loan lenders as you can to find the right loan for you. Consider not only interest rates but also repayment terms and any fees charged by the lender. Also keep in mind that some lenders might have less stringent eligibility requirements for coronavirus hardship loans.
- Pick a loan option. After youâve compared lenders, choose the loan option that works best for you.
- Complete the application. Once youâve chosen a lender, youâll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs.
- Get your funds. If youâre approved, the lender will have you sign for the loan so the funds can be released to you. The time to fund for personal loans is typically one week or less â though some lenders offer next-day or even same-day loans to approved borrowers. Hardship loans might also be funded more quickly.
If youâre struggling to get approved for a loan, consider applying with a cosigner. Not all lenders allow cosigners on personal loans, but there are a few that do. Even if you donât need a cosigner to qualify, having one could get you a lower rate than youâd get on your own.
Learn More: How to Get a Personal Loan With a 600 Credit Score
Alternatives to a hardship loan
Coronavirus hardship loans and fast personal loans arenât your only relief options during the pandemic.
Here are a few other alternatives to consider:
- Talk to your lender. Many lenders are offering various relief options to borrowers impacted by the pandemic. For example, you might be able to temporarily pause or reduce payments. Be sure to reach out to your lender to see what assistance might be available to you.
- Take out a cash advance on your credit card. With some credit cards, you can access cash by taking out a cash advance at an ATM. However, keep in mind that a credit card cash advance often comes with a much higher interest rate compared to the usual
- Apply for a car title loan. This is a type of secured personal loan that uses the title of your vehicle (such as a car or motorcycle) as collateral. Like payday loans, car title loans are often extremely expensive. Plus, if you canât repay the loan, you could lose your vehicle. Because of this risk, you should generally only take out a car title loan if you have no other options.
- Tap into your homeâs equity. If youâre a homeowner, you might be able to access the equity in your home through a home equity loan or a home equity line of credit (HELOC). Because these types of loans are secured by your homeâs equity, they often come with lower interest rates compared to personal loans. However, keep in mind that if you canât make your payments, you risk losing your home.
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lenderâs eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrowerâs chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
Learn more: Coronavirus Impact Sends Student Loan Rates Tumbling