Before you get a loan of any sort, you need to think carefully about whether or not you want a loan. While it’s true that a loan can ease the worries and give you all the security that a second income from a father would have created, they are not the cure all. Your financial headaches can quickly become a thing of the past…until you are required to repay them.
Finding yourself as a single parent is very difficult and it’s true that a loan can allow you to cover a lot of areas that will be integral to the upbringing and security of your child or children. This article will take a focused look on one or two of the loans that could be best suited for you. Always remember that you will need paperwork at various points during the application process and you may have to list something as collateral. Be smart and never over extend your capabilities. There are basically two categories of loans: private loans and government loans. Almost all the loans an individual can qualify for are private loans.
The only exception being government backed student loans. Now first of all, government loans are a specific category of loan. The government does not just hand out loans like candy to people who ask, no matter how much you may “need” the money. In reality, government loans usually come in the form of federal student loans. Federal student loans are loans that are backed by the federal government. This means that the loans have some of the lowest interest rates in the loan industry and come with all sorts of “breaks” for students, such as loan deferment.
Note: depending on your situation and what you need money for, there are other programs available to you besides loans. For example, if you intent to go to school, you can look at private scholarship programs like the 10k scholarship for mothers or even something like the Federal Pell Grant. Your college financial aid office will have more information on school financial aid programs.
Private Loans
Debt Consolidation Loans
Debt consolidation loans could be the perfect deal for you if you have a lot of outstanding debts already. This loan will give you a lot of money straight away that will allow you to address your other debts and money problems. This loan will then mean that you just have to make one payment each month to the person who is giving you the debt consolidation loan.
Pretty much everyone can apply for these loans but the only problem is that you will have to watch out for sneaky rate increases to stop yourself from being hugely ripped off when you are at your most desperate. This is the perfect deal for you if you are just looking to create a clean slate and start all over again in terms of your financial future. Most debt consolidation loans are private loans, however.
Secured Loans
Another option that you could use is applying for a secured loan. A secured loan will commonly let you borrow money up to the value or your home or something else that is worth a great deal of money. This will be because the supplier of the loan will never lend you more than your assets are actually worth.
The loan provider will commonly send a person to your house in order to judge the value and the amount of money that you will ultimately be allowed to borrow. The vital thing to remember in this case is that as a single mother you are using the roof over your child’s head as the equity. You are not advised to apply for one of these loans if you have no chance in hell of ever being able to pay it back.
Unsecured Loans
This are hard to get — you need to have very good credit and you need to have the assets to be able to “cover” the loan. Unlike a secured loan, your assets are NOT put up against the loan value. This makes unsecured loans very sought after and also very difficult to get. Most loans like business and personal loans will be of the secured type. But it is possible to get an unsecured loan if you have stellar credit and the assets to back up the loan.
Payday Loans
These are another kind of loan that have recently become popular. You don’t need any sort of credit rating to qualify and the loan amounts are usually a few hundred to a few thousand (at most). However, you pay sharp interest rates and additional fees on the loan value. If you fail to repay, your interest rate after a month or two can surpass the original amount you borrowed! So avoid this unless you absolutely have to.
Government Loans
Federal Student Loans
The government makes available student loans to help fund education. These must be re-payed but are quite flexible in the repayment dates while you are going to school. The interest rates are very low. You must be a student, however.
Keep in mind there are other programs out there besides loans that can help you pay for school. For example, there is the 10k scholarship 4 moms which is a scholarship giveaway program. Each month, one mother wins $10,000 to use towards her education. It’s free to sign up for this scholarship program. For federal programs, you can fill out the FAFSA student loan application to give you access to federal student loans and federal grants. If your FAFSA application shows you are financially needy, you will qualify for loans, scholarships, and grants offered by the government.
Loans for single moms are a good way to access a lot of instant cash. However, do not be blinded by the prospect of new wealth and fortune because if you go for a wrong loan then it will mean you are left with massive rates and debts that are far greater than any thing you had before hand.
I’ve posted a brief video CBS did about Payday loans and the scheme that these companies operate by. Make sure you watch it before you consider any sort of payday loan! I get many questions about Payday loans and my answer is always, avoid them unless you have no other option then still avoid them! Really, you can land yourself in a lot of problem if you get no credit check loans (payday loans). Anyways, here’s the video:
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