Are there any personal loan programs for single parents with bad credit?

When it comes to single parents, there are no personal or government programs directed specifically to this group. That is why, single parents who do not have a good credit history can have problems with renting apartments, buying a car or a house, starting their new business or going back to college.

However, there is a possibility for mothers or fathers who live alone – government benefit program for families with low income. Below you will find options which may be found useful in various situations.

In debt

If you owe more than $10.000 of unsecured debt, such as personal loans or credit cards, you may need a  debt settlement program by which you may receive some relief from creditors. If you think about consolidation loans, it is not the best option for those with a bad credit history. Read more about debt settlement pros and cons.

No income

It is obvious that without a steady job and earnings it is much more difficult to get a loan. On the other hand, being a single parent does not make it easy to have a good job with good income. Private lenders want to see a proof that you are going to be able to make regular monthly payments. If you are preparing your personal loan application you should have documents showing that you have alternative cash sources which can be: alimony, child support, unemployment benefits, disability benefits, temporary assistance for needy families.

Car loans

There are no single parents loans. In your case the best idea is to choose a good and reliable, but cheaper vehicle. Generally, there are no favors for single parents buying a car. You should also think about a cushion in case of some emergency so that you could avoid potential repossession caused by financial trouble. Another important matter while buying a car is insurance. First of all, the cheaper the car, the lower the auto insurance rates. But remember that accidents happen and in your situation it may be a good decision to pay extra for these: personal injury protection, extended repair warranty, roadside service and towing, rental reimbursement coverage.

Business loans/grants

Starting your business can be a good idea when you need to balance your work and personal life, but on the other hand, it is not easy when you have poor credit. You may use the help of government grants – these are aimed especially at single moms and minorities. A grant is a better option than a loan as you do not have to repay it. When it comes to loans, it may be much more challenging option for you. It is not easy to receive it and it demands a good business plan and history of earnings growth. You can look for help at your local Small Business Administration office where you will receive help in preparing a business plan, contacting with a volunteer mentor and local lenders who may want to provide you with funds you need.

Buying or renting home

If you want to rent an apartment, you may count on the government’s help for low-income families. There are three programs: Privately owned subsidized housing, Public housing, Housing Choice Voucher Program. If you want to buy a house, think it over very carefully. Take the whole initial and then regular maintenance costs into consideration before you start applying for a mortgage.