Single parents can save them from financial disaster when they take out a proper loan and follow strategic debt management plans to avoid any missed payments. You may already know about the consequences of failing to repay your debts and therefore knowing about all available options and making the right choice is crucial. Moreover, single moms and dads having one source of income and probably no support from others financially and otherwise, need to be more cautious to prevent making their financial situations worse.
Therefore, if you are in need of money, start researching about it beginning with the types of loans available to you. Thorough research will keep you from losing your car, home, and even your sanity and sleep.
Available loan options
For single parents, there are different types of loans available. People might tell you that getting into debt as a single mother or father is a horrible idea having a limited source of income but it is not true. It all depends on the type of loans you choose and the amount you borrow. Your eligibility, affordability to pay back, level of commitment to repay your loan and how reasonably you use it is all that matters. However, the types of loans that you may consider to get temporary relief or a boost to deal with your financial troubles include:
- Student loans – These loans are specially designed to provide help to people in meeting educational expenses.
- Home loans – If you have a specific house in mind to buy but cannot afford with your limited income, you can avail home loans to buy your house by paying a mortgage.
- Personal loans – These loans are very useful when monthly bills seem to go out of your control. The high rates of interest of each bill can make the situation overwhelming. The best way is to take out a personal loan at low interest and long tenure to consolidate all your bills into one. This will save you a lot of money in interest.
- Emergency loans – These loans carry high interest and high fees and therefore should be considered only when there is no other alternative open to you. In times of crisis when you do not have any fund to meet the expenses, an emergency loan can provide you with great peace in mind making your difficult times little easier.
- Bad credit loans – Just as the name suggests, these loans are meant for people who are struggling with their debt and have already damaged their credit score. Helping you to rectify your financial mistakes made in the past, these loans will put your finance back on the track and you on your feet. Once again these loans carry a high rate of interest and must be used and paid off sensibly so that you can improve your credit.
- Auto loans – If you need a car to go to work or reach your children to school or even to shop your groceries, you can take out an auto loan just as a home loan. Making sure that you continue to make the monthly payments on time, you can enjoy your ride.
- Business loans – If you are in business you can avail a business loan to keep up with the expenses and emergencies and achieve the desired success in your career.
No matter what type of loan you choose to take, make sure you take it from a reliable source and continue making the payment. If banks do not provide you with such loans, you can try out other alternative sources such as liberty lending as well. There are other several other types of loans that you can consider as well.
- Secured loans are those loans in which you will have to set up collateral. If you default then this collateral will be taken away from you and sell it off to make up the money you borrowed. You will need a decent credit score to get a secured loan and the amount of money offered will depend on the value of the collateral offered.
- Unsecured loans are almost the same as secured loans but to get these loans you do not need to make an offer for any collateral. However, poor credit history and a low income may be a hindrance in getting such loans since there is no collateral offered. The loan amount offered to you will also depend on these two factors.
- A fast cash advance is a special type of loan in which you may be offered cash at a high rate of interest. Few companies may even ask for collateral for such loans. However, the repayment period is short for these loans, but if you linger in making payments, more will be the amount to repay.
- Christian lending is a special type of financial assistance provided to single parents by different organizations, charitable or otherwise. You have to prove your need and tell the purpose of the loan. Ideally, your need should revolve around food, shelter, utility bills and transportation.
- Second chance loans will provide to bring your finance back on track and rectify your mistakes made in the past. Ideally, these are loans given to people with poor credit and the money provided goes into a share account. When you earn money from your job, the amount gets deposited into this share account. Once the loan is paid off, you accrued savings and improve your credit score as well. Once again, your credit history and income will determine your eligibility for such loans.
- Home equity loans are another option for single parents in which you can use your home as collateral for the money you want. This money is ideally spent on home repairs, college tuition, and medical bills. However, you run into the risk of losing your house if you do not repay. Apart from a good credit history, the loan to value ratio must be good as well to get this loan.
Therefore, being a single mother or father, you too can avail different loan options provided you can pay back.