What Are Hardship Loans & How Do They Work?
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is a Hardship Loan?
How Do Hardship Loans Apply to the COVID-19 Pandemic?
What Can a Hardship Loan Be Used For?
Groceries Rent Mortgage payments Gas Medical bills Utilities Car payments
What Are the Repayment Options for a Hardship Loan?
Who May Qualify for a COVID-19 Hardship Loan?
Work with a reputable institution for your loan: If you’re not familiar with a company, take the time to do your homework. Visit the company’s website, read online reviews, check for complaints on the Consumer Financial Protection Bureau’s website and more. Be mindful of providing sensitive financial information: This includes your Social Security number, date of birth and other personally identifying information. Watch out for sky-high APRs: Know, too, that there are payday lenders who may dress up their products and call them hardship loans when they are in fact payday loans with exorbitant interest rates that they will likely want you to repay in short order.
What Are Alternatives to a Hardship Loan?
Defer payments
Turn to your employer
Take advantage of local resources
Consider getting another type of loan
The Takeaway
Photo credit: iStock/Hispanolistic
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About the Author
Sheryl Nance-Nash is a freelance writer specializing in personal finance, business, and travel. Her work has appeared in Money Magazine, Newsday, The New York Times, Business Insider, BBC.com, AARP the Magazine, ABCNews.com, Forbes.com, among others.
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