Guide to Personal Loans for Single Mothers

Q: How can single moms get loans?

Being approved for a personal loan depends on credit profile, debt-to-income ratio, and other financial factors, and such guidelines and expectations apply to single mothers just as they do to everyone else.

Q: Is there any financial aid for single mothers?

There are many state and federal grants for single mothers in need, such as TANF and food stamps. Medicaid , which subsidizes health insurance based on income, is very helpful. Private lenders who evaluate applications for personal loans do not offer financial aid.

Q: Can you get a personal loan while unemployed?

It won’t be easy, because lenders need to see a strong likelihood of you being able to pay back the loan. How can monthly payments be made without steady income? Other sources of income, like unemployment and child support, might help your application. You could also offer up collateral (like a car) or someone to cosign who has a large steady income.

Q: What is the easiest type of personal loan to get approved for?

The “easiest” personal loans to get approved for come with lenient credit score requirements, and a variety of loan amounts as well as an openness to cosigners. Because the loan is easy to get does not mean it is the best loan for your financial situation, however. Check the interest rate and fees.

Q: How do I qualify for a small personal loan?

The question the lender will be asking is: Is your income high enough to cover the loan repayment amount and your other monthly expenses? If the loan amount is small and you have enough income–and a strong credit score–it should be possible to qualify.

Are There Personal Loans for Single Mothers?

Lauren WardUpdated April 17, 2023

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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.

Banks don’t decide on personal loans based on your marital status or the existence of children. If you’re a single mother interested in a personal loan, you will be evaluated based on your credit profile and income situation.So while there aren’t any loans created specifically for single mothers, this certainly doesn’t mean a single mom can’t get one.

What Are Personal Loans?

A personal loan is money borrowed from a bank or other financial institution with a set repayment period. This type of consumer loan is repaid in set monthly amounts. You might have to pay back the loan in a year or you might have up to seven years to pay it back.

Pros and Cons of Personal Loans for Single Mothers

Pros of Personal Loans for Single Mothers	Cons of Personal Loans for Single Mothers
Funds can be used for a variety of purposes	Repayment term can be short (6 months to 5–7 years)
May qualify to borrow a large amount of money	Monthly payments are higher than credit card installments
Borrowers can choose to take out unsecured personal loans, so no need to use collateral	Origination fee can drive up the total cost of the loan

Are There Loan Options for Single Moms With Bad Credit?

Anyone with bad credit is going to have a difficult time being approved for a loan. Options may exist, but they could come with high interest and unfavorable terms.

Are There Loan Options for Single Moms With No Income?

Since banks are naturally intent on having people pay back the loans, it is unlikely that anyone, single mom or not, will be able to get a personal loan with no income and, therefore, no way to pay it back.

Typical Personal Loan Terms for Single Mothers

The truth is, “typical loan terms” do not exist because each and every borrower is unique and this applies to single mothers. The factors listed below can influence a loan’s terms:

Credit score
Income
Debt-to-income ratio
Loan amount
Repayment period
Collateral
Interest type
Employment history
Lender fees
Benchmark interest rates

Therefore, while the principal amount may be the same between borrowers, the amount each borrower pays may vary by a significant margin.

Tips for Finding a Personal Loan

Following these points could help.

Compare Requirements

These requirements can be anything from a minimum income to a minimum credit score. (And bear in mind that some lenders only offer bad credit loans.)

Credit score

To get the best loan terms, you’ll want to have a strong credit score. If you don’t know what your score is, your bank may give you free updates each month. Some credit agencies will let you check your credit score for a low fee.

Debt-to-income ratio

Your debt-to-income ratio is all of your monthly recurring debt payments divided by your gross income (the money you make before taxes and insurance are taken out). A common maximum DTI that lenders stop lending at is 43%.

Collateral

Collateral is only used for secured loans and is what is used to actually “secure” the loan. What can be used as collateral? Cars and homes are the most accepted forms, but if you own other assets, it’s possible a lender may be willing to work with you. While an unsecured loan may sound like a better deal because you’re not at risk of losing anything, unsecured loans come with higher interest rates.

Cosigner

Personal loans for single moms with bad credit may be easier if you have a cosigner. The drawback, however, is that both of your credit scores will take a hit if you miss a payment.

Employment

Lenders like to see consistent employment, with little to no gaps in employment history. If you only recently obtained employment after a lengthy absence, lenders may hesitate to work with you.

Compare Terms

All loans are not created equal. When choosing loans, compare the terms of each. This means you should evaluate:

Fees
Repayment period
Interest rate

Soft credit pulls

A soft credit pull does not hurt your credit score, hence the term “soft.” While loan shopping, companies that initially do soft credit pulls won’t damage your credit profile, so it’s safe to run some numbers with them to see if you’re interested in their potential offer.

Fees

Each lender is different both in the types of fees they charge and the amount they charge. If a loan has the lowest interest rate, it’s possible for it to still be the most expensive option when you compare origination and application fees. While comparing, also look at:

Prepayment penalty
Returned check fee
Late payment fee
Returned check fee

Repayment term

The longer the repayment period you have, the less amount of money you’ll pay each month. However, you’ll pay more in interest as time goes by. Shorter loan terms mean more aggressive payments, but you’ll pay less in interest overall. However, there are some quick personal loans on the market that, even though they have short repayment periods, still come with higher than average interest rates.

Compare Interest Rates and Total Cost

Comparing personal loan rates is essential if you want to save the most amount of money. Once you know the interest rate and other fees, you’ll be able to determine the total cost of the loan. Take this information to an online loan calculator to determine how much it will cost you to borrow from each lender. Note: Borrowers may receive lower interest rates with a credit card.

Consider Total Monthly Payment Amount

While you may want to save the most money, if a loan payment takes up too much of your monthly income, you may want to consider another lender offering a longer repayment period even if they’ll charge you more in interest.

Applying for a Personal Loan

Gather Documentation

You’ll need the following documents when applying for a personal loan:

Government- issued ID
Bank statements
Tax returns
Pay stubs
Proof of address

What to Do Once You Are Approved for a Personal Loan

If you’re approved for a personal loan, you’ll need to sign any necessary loan agreements and documentation. Many lenders offer digital signing services so you don’t even need to print anything.

What to Do if You Aren’t Approved

If you’re not approved, it’s not over. Consider finding another lender that has more flexible requirements. However, in doing so, you may pay more in interest.

Paying Back a Personal Loan

If your loan application is accepted, the lender typically sends you the funds within a few business days. Setting up payment reminders can help you avoid late fees and marks against your credit.Your monthly payments will begin shortly after taking out the loan. If you sign up for auto-payments, your interest rate may be slightly lowered.

Personal Loan Alternatives for Single Mothers

There may be other types of loans or financing, such as payday loans, that are available.

Home Loans

Personal loans vs. mortgages? Mortgages are only used to purchase homes, but if that’s what you’re looking for, there are a few types of mortgages on the market that have lower credit score and down-payment requirements:

FHA Loan: A 3.5% down-payment option for borrowers with low to average credit scores.
VA Loan: A no- down-payment mortgage for active and retired military, as well as their spouses.
USDA Loan: A no- down-payment mortgage option for homebuyers buying in rural areas.

Grants and Non-Profit Aid

A grant is money that does not have to be repaid. If you would struggle to make monthly payments after receiving a loan, then you should strongly consider alternative ways to receive funding.

Educational aid

There are many educational grants on the market specifically designed for low-income women. Look for grants made for specific educational tracks that interest you. This way, you may have less competition and can hopefully explore new career opportunities.

Childcare programs

The U.S. government offers childcare aid to help single mothers. Funds can be used for things such as childcare, schooling, and extracurricular activities.

TANF

For short-term assistance, consider applying for Temporary Assistance for Needy Families, or TANF, until you’re able to get your feet back on the ground. TANF is not a long- term solution, but can help if your current financial situation is unusual.

DCA

Diversion cash assistance can be used for emergencies and is also offered through the U.S. government. If you receive funds through DCA, however, you cannot also receive TANF aid.

Emergency financial assistance

What are you struggling to pay? If you’re having trouble paying rent, mortgage, or utilities, search for assistance that’s aimed at what you specifically need help with. Many cities and states have programs in place. You can also search for help at the national level, too.

Discovering Your Personal Loan Rate

While loans specifically made for single moms don’t exist, there are many types of personal loans available. Just be sure to shop around and compare rates to ensure you’re getting the best deal.

Frequently Asked Questions

How can single moms get loans?

Is there any financial aid for single mothers?

Can you get a personal loan while unemployed?

What is the easiest type of personal loan to get approved for?

How do I qualify for a small personal loan?

Photo credit: iStock/DisobeyArt

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About the Author

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.

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