It could be possible to apply loans for the disabled. All lending institutions, including direct lenders, are entitled to treat you the same way they treat any other customers. If you have a full-time job or a regular and stable income source and a good credit score, you have a lot of borrowing options.
However, it may not be that easy if your credit rating is less-than-perfect and you do not have a regular income source. Banks and mainstream lending institutions will likely refuse your application, but if you need money to meet unexpected expenses, direct lenders can give you a helping hand.
Before you apply for the loan, you should consider your financial situation and decide if they are the best option to fund your needs. It is generally recommended that you take out these loans when you have an emergency. For instance, you have come across an unexpected medical bill.
What are Loans for the Disabled?
Loans for the disabled, as the name suggests, are a type of funding source that you can seek when you have run out of money and need it for urgent reasons. However, you will seek these loans from an online lender when your income source is not stable, and your credit rating is poor.
These are short-term loans and therefore have a repayment length of up to a month, and you will have to pay back the whole of the amount in a lump sum. Therefore, it is crucial that you borrow money only when you are completely sure that you can pay off the debt without any difficulty.
Managing money can be quite hard, so take a look at your expenses and see if you have some scope to whittle them down, so you do not face any complications in paying off the debt.
What are the Types of Loans for the Disabled?
Now that you know that loans for the disabled are short-term loans and aim at funding emergency expenses. They come in various forms. Before opting for them, you will have to understand their nature and how they work.
1. Payday Loans
Payday loans are very popular funding sources when an emergency comes up. You can take out these loans only with direct lenders. If your tumble dryer has conked out or your microwave is not up and running, you can take the help of these loans.
You can borrow money the same day when you put in the application. Just fill in the details and submit the form online. The decision is made quickly based on your income, and no credit score is checked. Hence, these loans usually target those with bad credit ratings.
The loan is repaid in a period of two weeks. Because no credit check is made, you will be charged a higher interest rate. If you cannot pay off the loan on time, you can roll it over, but late payment fees will be charged. You must have a full-time job to apply for these loans.
2. Doorstep Loans
Doorstep loans aim at helping those people who are retired or unemployed. You can apply for these loans if you are on disability benefits and need money for emergencies. Since a lender wants to get the money back, they must check your repaying capacity, and taking out a loan without a job seems counteractive.
Well, it is possible, as you still need to show some sort of income. Having no full-time job does not mean that you should have even a passive income source. You must be able to prove your repaying capacity. Income from the pension, disability benefits, rent, a part-time job, dividend, etc., could be used to pay off the debt.
Note that doorstep cash loans in Ireland are approved when a lender is sure that you can repay the debt without compromising your recurring expenses. These loans can carry slightly higher interest rates if your credit rating is poor.
Doorstep loans have been designed for those who are not eligible for payday loans. A representative of a lender will visit your home at a scheduled time, as agreed on a telephone conversation, and discuss all requirements. After reviewing your income records, they will immediately hand you money if they find you an eligible candidate.
These loans also have a smaller repayment length and are normally paid back in one go. Also you can ask a lender if they can put you on instalment repayments. In that case, they will offer a weekly instalment plan. However, the fees charged by a lender could be slightly higher because of the representative’s visit to your home during handling or collecting money.
3. Guarantor Loans
If you are out of work and your credit rating is not stellar. You will likely have difficulty getting your loan signed off. Most of the lenders will turn you down because of high-risk transactions. If any lender gives the nod, they will charge a high-interest rate.
To protect yourself, you can arrange a guarantor who can be your friend, family or anyone of your acquaintance. They must have a good credit history. Otherwise, they will not be able to act as a guarantor.
It reduces the risk of a lender because they can call upon a guarantor when you make a default. People often resist acting as a guarantor as it can also badly impact their credit rating if they default.
Arranging a guarantor is seriously a tough job. Finding a co-applicant is an alternative. You can ask your spouse or any other family members to enter into a contract as a co-applicant, provided they have a good credit rating.
Now you both are equally responsible for paying down the debt. If any one of you makes a default, the other one will be fully responsible for settling the dues.
There are various types of loans for the disabled but each one has different features although they all aim at bailing you out when you have an emergency. Weigh up carefully, so you do not face any problems down the line.