Personal Loans for Single Mothers & Other Sources of Financial Aid
Financial emergencies can be especially tough on single parents, but there are a number of loan options single mothers can consider. From personal loans to federal aid, money is available to single moms to cover a wide range of expenses, even if they have bad credit.
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Single moms have a tough job, and there are a lot of them out there taking on this responsibility. According to the U.S. Census Bureau, 23% of children under 18 live with single mothers.
Raising a family alone and on one income—which is sometimes limited—is challenging even during the best times. But when unexpected expenses pop up, that can be a disaster. During these tough times, a personal loan may be able to help a single mom facing a challenging financial situation.
In this guide:
- Where to find personal loans for single moms
- Other types of aid and loans for single moms
- Important questions and considerations
Where to find personal loans for single moms
Personal loans aren’t the only loan option available to single moms, but they do provide the most flexibility as they can be used for a wide variety of purposes.
Being a single mom doesn’t have any direct bearing on which lenders you can borrow from. What it does affect is your credit score, income, and financial history. With a good credit history and stable income, you’ll have your pick of the best personal loan lenders.
With a not-so-stellar credit history and finances that are stretched thin, you may need to turn to a fair or bad credit lender.
Looking for the right personal loans for single mothers? We’ve outlined a few of the best personal loans below.
3.49% – 19.99%
$5,000 – $100,000
LightStream offers personal loans to borrowers with good-to-excellent credit histories. Its quick application process means you might be able to receive your money the same day you apply, and its low interest rates and no fees make it a very strong option for those who qualify.
- Credit score category: Good, fair
- Soft credit pull to check rates: Not available
- Deposit time: As soon as the same day
- Origination fee: 0%
- Late fee: None
- Discounts: 0.50% interest rate reduction for enrolling in autopay
- Repayment terms: 24 – 144 months
7.99% – 35.97%
$1,000 – $35,000
Upgrade is a great option for borrowers with bad or fair credit. Their loans are unsecured, so customers don’t have to use their homes or cars as collateral. Eligibility is based more on free cash flow as compared to other lenders.
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As soon as the next day
- Origination fee: 2.9% – 8%
- Late fee: $10
- Repayment terms: 36 or 60 months
10.68% – 35.89%
$1,000 – $40,000
LendingClub’s peer-to-peer lending platform offers loans to those with bad and fair credit. Their quick and simple loan application process allows borrowers to receive funds as soon as 4 business days. If a borrower decides to pay off their personal loan early, there will be no prepayment penalties.
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As soon as 4 business days
- Origination fee: 1% – 6%
- Late fee: $15 or 5% of payment amount
- Repayment terms: 36 or 60 months
Other types of aid and loans for single moms
Personal loans are a great option for many situations because they are usually unsecured, meaning you’re not putting your personal property on the line should you not be able to pay it back.
However, there may be specific situations when a personal loan isn’t the right answer. Here are some other loan options to consider:
Home loans for single mothers
If you’re trying to purchase a home for your family, you’ll need a mortgage loan, rather than a personal loan.
A mortgage uses your home as collateral for the loan, which means you’ll get lower rates than you would on a personal loan, but if you’re unable to make the loan payments, the lender could foreclose on your home.
Just like with personal loans, single mothers are eligible for the same loans as everyone else. If you have the credit and income required by a lender, you can qualify for the loan.
But if raising kids as a single parent has put an extra strain on your finances, a traditional mortgage loan might be out of reach. Luckily, there are a number of first-time home buyer programs that can offer assistance:
- FHA loans: FHA loans are designed to make home buying more affordable for middle- and low-income first-time homebuyers.
- VA loans: VA-approved lenders offer mortgages with no down payment loans for military members, veterans, and their surviving spouses.
- USDA loans: USDA loans offer mortgages with no down payment for eligible home buyers in rural areas.
Even if you’ve owned a home in the past, you may still be able to qualify for these loans if you meet income limits and haven’t purchased a home in the past few years.
Federal grants and non-profit aid for single moms
A loan isn’t always the right answer. If you’re having trouble paying rent, buying groceries, paying your energy bill, or covering a critical medical bill, you might be able to find help without taking out a loan.
Federal aid is available through a number of programs to help you make ends meet and provide the basics your family needs. These programs can help you pay for food, find and pay for housing, get medical insurance, or receive reduced-cost childcare.
Aside from Federal aid, there are also charitable organizations and state and local assistance programs that can help you get the support you need.
You can learn more in our guide to programs that offer help for single moms.
Educational aid for single moms
Support isn’t only available for your living costs. If you are trying to get an education to further your career, there are options for aid outside of traditional student loans.
You can also apply for a number of scholarships available to help single moms continue their education. These scholarships can help ease the financial burden of paying tuition, taking time off work, and hiring childcare. You can read more in our guide to scholarships for single moms.
Important questions and considerations
To make the best decision about your loan options, there are likely other important questions that you need answers to.
No, lenders cannot legally discriminate based on your marital status. A lender needs to evaluate married and single applicants based on the same set of criteria.
However, these criteria will often include evaluating your current debt, income, and credit history. If you’re the only income earner in your household as a single mother, that might mean that your finances could be strained and not ideal for lenders.
That’s why it’s important to research and understand all of the loan and aid programs available—it can help you qualify to receive the money that you need.
Probably not. Payday loans may seem like a fast and easy way to get the cash that you need, but payday loan lenders are often found to be predatory in their practices by targeting people in tough financial situations.
These short-term loans (they’re often due on your next payday) come with high rates and fees. A typical annual percentage rate (APR) on these loans can be 400%. Compared to credit card APRs which often range from 12% to 30%, a payday loan is a very expensive way to borrow money.
Payday loans can also lead to a cycle of debt. When borrowers are unable to repay their loan, they often take out another loan (and incur more fees) to pay off the initial loan. This kicks off a repeating pattern of taking on debt, and can leave you in a worse financial position than you were originally.
Before you decide to take out a payday loan, it’s important to understand how payday loans work. And it’s a good idea to research the alternatives to a payday loan, so you can make the best financial decision for your family.
Once you start looking at loan options, you might begin to wonder how to figure out which option is best for you.
Every borrower is going to have different options, based on their need and their financial situation. Rather than compare options with what other people may receive, it’s a good idea to compare offers that you receive directly.
You should get a prequalified quote from at least three different lenders before submitting a full application to one of them.
Many lenders do a soft credit pull, rather than a hard credit pull, before they give you an initial loan offer, which means that your credit score won’t be negatively affected by checking your options with multiple lenders.
When you get quotes, compare:
- APRs: The APR on your loan will tell you what the total annual cost of your loan is, including both the interest rate and related fees. It helps to give you a more accurate total cost of the loan. The higher the APR on the loan, the more money you can expect to pay in interest and fees.
- Loan amounts: Different lenders may have different minimum and maximum loan amounts they’re willing to offer you. Review each loan amount to see which ones meet your needs.
- Loan repayment terms: How long will they lend you money and what will your monthly payment be? Loans with a longer repayment term will mean your monthly payment is less, but you could also end up paying more in interest in the long run.
Even small differences in your APR or repayment timeline will have a profound effect on your budget, so use a personal loan calculator beforehand, so you know what you can afford.
Improving your credit can be a great way to save money on a loan. Borrowers with better credit are often offered lower interest rates, which means they pay less money over the life of the loan.
For example, on a $10,000 3-year loan with a 10% interest rate, you’ll end up paying $2,424 in interest. If you’re able to improve your credit and qualify for a 6% rate, you’ll end up paying $1,428 in interest—a savings of nearly $1,000.
If you don’t need the money urgently, it makes sense to take steps to improve your credit score before you apply. Learn more in our guide to how to improve your credit score.
Applying for a personal loan is easy. Many lenders allow you to apply online in a matter of minutes. To apply for a personal loan, you’ll want to use these five steps:
- Check your credit score
- Determine whether you need a personal loan with a co-signer or co-applicant
- Decide how much you can afford to borrow based on loan payments and total cost
- Apply for pre-qualification with multiple lenders
- Compare quotes and choose a lender, then submit a full application
Get more details on these steps in our guide to how to apply for a personal loan.
When getting a quote from potential lenders, you’ll need to provide some information for them to assess what loan you may qualify for. This can include:
- Your name
- Your address
- An estimate of your credit score (some lenders may do a soft credit pull to get your score)
- Your current income
- What you plan to use the loan for
- Your social security number
Once you choose a lender, they’ll need to verify your information with additional documents. They may ask for:
- Government-issued I.D.
- Proof of address
- Proof of income, which can include pay stubs and tax returns
- Proof of assets, which can include bank account and investment account balances
Get organized early with all of the documentation you may need to apply for a loan.
A personal loan can offer financial support to a single mother when she needs it the most. Depending on income, financial history, and need, there are a number of different options to consider before making your final choice.
Author: Erica Gellerman