Personal Loans for Single Mothers
Have the bills caught up to you? Here's a list of the best personal loans for single mothers. Read on and choose what fits your needs.
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Here are the best personal loans for a single mom:
- SoFi for best overall
- Universal Credit for low credit scores
- LightStream for low interest rates
- Upstart for fast approval
- Upgrade for no income requirement
As a single mother, are you struggling to make ends meet? Are you in need of financial assistance to support your family? If so, you may want to consider a personal loan.
Being a single mother is a tough job, and finances can often be a source of stress and worry. While government assistance programs are available, you may need more to cover all your expenses.
So, let us explore the options available for personal loans for single mothers and what to consider before taking one.
What are personal loans?
Personal loans are a fixed amount of money you can borrow from banks and lenders. They are usually unsecured, meaning you don't have to put down any collateral to get one. So, you won't risk losing anything you own if you can't make your repayments on time.
Personal loans are short-term and can be paid in about 1-7 years. You can borrow as little as $1,000 with an online lender and as high as $100,000 with traditional lenders.
Best Personal Loans for Single Mothers
Here is a quick comparison of the best personal loans for single mothers.
| PERSONAL LOAN PROVIDERS | CREDIT SCORE | LOAN AMOUNT RANGE | LOAN TERMS |
|---|---|---|---|
| SoFi | 680 | $5,000 to $100,000 | 24 to 84 months |
| Universal Credit | 560 | $1,000 to $50,000 | 36 to 60 months |
| LightStream | 670 | $5,000 to $100,000 | 24 to 144 months |
| Upstart | 300 | $1,000 to $50,000 | 36 to 60 months |
| Upgrade | 580 | $500 to $25,000 | 24 to 84 months |
Now, let us take a closer look at their best offers and which one fits your needs.
SoFi Best Overall Lender
If you have excellent credit (at least 680), consider SoFi for your personal loan. SoFi offers better benefits than other lenders.
You can get a personal loan up to $100,000. The funds could be available the same day your loan is approved. Or if you have credit card debt, SoFi can even directly pay it off.
But more than just providing loans, they offer all their members free 1-on-1 career coaching and financial guidance to help you make smarter money decisions.
Also, their Unemployment Protection program allows you to postpone payments if you lose your job. And you can get coaching support to help you find a new job.
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However, SoFi is designed for single moms with good credit and annual income. The next lender is a good option if you worry about your credit score.
Universal Credit for Low Credit Score
If you have a low credit score, Universal Credit may be your best option. Compared to other personal loan providers, it only requires a minimum credit score of 560.
Also, it has lower APR rates than other lenders, allowing you to find a loan with more manageable terms and payments.
Additionally, it does not require any collateral or application fees, making it easier for single mothers with limited resources to access the funds they need.
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But longer repayments also mean higher interest rates. Fortunately, other personal loans offer the same quality of service plus low-interest rates. Check LightStream below.
LightStream for Low Interest Rates
LightStream's Rate Beat Program will counter a provider's offer by giving you an interest rate that is less by 0.1% than that of their competition's.[1]
You only need to show your approval for the fixed-rate loan. Make sure it has the same terms, amount, and purpose. Lastly, LightStream requires a good to excellent credit score. You typically need to have a FICO score of at least 670 to get approval for a loan.
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Aside from low-interest rate, time is also of essence for most single moms. For faster loan processing, check Upstart.
Upstart for Fast Approvals
Upstart will look at more than just your credit score and income. Unlike other lenders, they also factor in your education and job history.
They use an artificial intelligence (AI)-based platform to review your loan application, making the process quicker and more favorable toward those with low credit.
Typically, Upstart requires a minimum credit score of 300.[2] But they can also consider applicants who need to build more credit history and don't yet have a score.
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If Upstart's additional requirements are too tight for you, you can try Upgrade for lesser and easier compliance with requirements.
Upgrade for No Income Requirement
If you're a single mom with lower income, look at Upgrade Personal Loans. They have no minimum income required. Application is fast and easy. Approved loans can be deposited into your account the next business day.
To qualify, you should have a minimum credit score of 580.
Upgrade offers up to $25,000 with flexible repayment options, competitive interest rates, low fees, and no prepayment penalties.
However, take note that it is not available in Iowa, West Virginia, or Washington, D.C.
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Can a single mom qualify for personal loans?
Yes, single moms can apply for personal loans. Personal loan requirements for single moms are the same as for any regular applicant.
Lenders will only look at your credit score, current debts, and income to check if you qualify for a personal loan and determine how much they can let you borrow.
Learn more about what influences your loan.
- Credit Score
Your credit score shows how good you are at managing your finances. It factors in your previous loans and if you made the repayments on time.A high credit score can get you a lower interest rate and qualify you for larger loan amounts. Aim for a credit score of 600 and above to increase your chances of getting approved for a personal loan.
If you need to know your credit score, check in with your bank or credit card company for a free credit score report. You can also get a free copy of your credit report once per year by visiting AnnualCreditReport.com.
What's your credit score? - Income
Lenders usually require a stable source of income before they can let you borrow money.For single moms with no or low income, look for loans that allow a co-signer. This will add to your income to be approved for a better loan.
You also check personal loan providers that have no income requirement.
What is a cosigner?
A cosigner can be a family member, friend, business partner, or colleague. They are secondarily liable for the payment of the loan. This means if you can't make the repayments or pay in full, they can be demanded to settle it. - Debt
Lenders evaluate your current debts and ability to pay them, given your financial status. They could offer you a lower amount or decline your application if it seems impractical.Ideally, your debt-to-income ratio (DTI), or your debts divided by your monthly income, should be 36% or lower to increase your chances of being approved for a loan.
Now, let us learn the important factors you must check before taking a personal loan.
What to Consider in a Personal Loan
Personal loans have conditions and requirements that are different for each lender. Similarly, you have unique needs and circumstances from the other applicants looking for loans.
So, it is best to examine how personal loan factors play into your situation.
- Interest Rates
An interest rate is the percentage of your loan amount added to your monthly repayments. It ranges from 6% to 36% and averages 10.82%. You can get a lower interest rate with a good credit score. - Fees
Personal loans can include additional fees outside of the amount that you borrow, such as processing fees and account maintenance fees. They can also include penalties for paying too early or too late.Origination fees, or how much you have to pay for the loan offer, can be 1%-8% of the total amount you borrow. - Loan Terms
A loan term is how long you have to repay your loan. On average, lenders give 1-7 years for you to complete your payments.The longer the loan term, the lower the monthly installments. But this could also mean you pay a higher total since you'll accumulate more interest.
If you are having second thoughts on getting personal loans, there are alternative options for financial assistance.
Personal Loan Alternatives
You can use personal loans to pay for groceries, bills, and medical expenses. Here are other ways for single moms to borrow money to suit more specific needs.
Government Assistance
Depending on where you live, you can qualify for financial assistance for childcare, food, and housing. If you're low on income or can't afford to repay loans, consider a government grant instead.
Federal financial assistance programs aim to help single parents with low to no income. What's great about this is that if you are eligible and receive aid, you won't have to pay anything back. Therefore, your finances won't be taking a toll.
- TANF (Temporary Assistance for Needy Families)
TANF Programs let you work for at least 30 hours per week (or 20 hours if you have children under the age of six) to receive cash assistance.[3] The benefits can last up to five years maximum to guarantee that you have enough time to get back on your feet financially.[4]
Although Government Loans offer advantages, loans for specific purposes, such as home and student loans, can also be beneficial.
Home Loans
If your priority is to secure a home for your family but a single income isn't enough, a home loan might work better for you. You can use it to finance a downpayment, make renovations, or even build a home from scratch.
With home loans, you get tax benefits, low-interest rates, and longer loan terms ranging from 15 to 30 years.
- FHA Loan (Federal Housing Administration Loan)
With FHA loans, you can buy or refinance your home with just 3.5% - 10% down payment depending on your credit score.FHA loan rates are usually lower than traditional mortgages from banks. They also have more forgiving qualifications.
- VA Loan (Veteran Affairs Loan)
VA loans are a lifetime benefit that helps military members, veterans, and eligible surviving spouses purchase their own home. They have low interest rates and don't require Private Mortgage Insurance or a down payment. - USDA Loan (United States Department of Agriculture Loan)
A USDA loan offers benefits, easy requirements, and competitive mortgage prices with no down payment for those in rural areas.
Aside from building homes, single mothers can also invest in their future by pursuing education. So next, let us review good options for applying for educational or student loans.
Student Loans
Want to further your career by pursuing higher studies? Paying for your own education can be expensive, especially if you're a single mom.
So, consider using student loans to pay for your tuition and other school expenses to make things lighter in your pocket.
- Stafford Loans
A Stafford loan is one of the most popular federal grants that will help pay for higher education. And, you won't have to worry about paying it back until six months after your graduation.[5] Even then it will be lighter with its low-interest rates. - GRAD Plus Loans
If you are a graduate or professional student with good credit history, GRAD Plus loans give financial aid for those enrolled in institutions under the Direct Loan Program.
Yes, you can get a personal loan for any expense the lender approves. However, you could also go for educational loans or financial assistance from the school or institution for tuition and other school needs. Another way single moms without income receive money is through government grants.
In addition to home and education loans, you can also fund other source of income like starting a business with a business loan.
Business Loans
Another alternative is business loans, which help fund your career and invest in profitable endeavors. Using the money to earn more instead of having it all go into expenses and bills is a great way to get out of a debt cycle.
- Startup Loans
If you want to become a businesswoman but don't have the resources to do so, a startup loan can give you the capital to start developing products, buy materials, rent spaces, and even hire help. You can use the cash to fund anything related to establishing your business. - SBA Loans (Small Business Administration Loans)
You can use SBA loans to either start a business or continue funding the one you already have if money's tight. Compared to loans from banks and traditional lenders, these are easier to get, have lower fees, and offer more flexible terms.
Bottom Line
A personal loan is a great way to get money to pay for groceries, bills, housing, and other expenses. Just make sure the amount you get is within your budget, and you can pay it all back during your loan term.
Before applying, compare lenders' offers to see which best suits your budget and needs.
When you want to avoid adding to your debt, check if you are qualified for government grants instead of personal loans. Consider alternatives like home loans, student loans, and business loans for more specific needs.
References
- ^ LightStream. Rate Beat Program, Retrieved 4/27/2023
- ^ Upstart. What are the minimum credit requirements to receive a loan?, Retrieved 4/27/2023
- ^ U.S. Department of Health and Human Services. TANF Work Requirements and State Strategies to Fulfill Them, Retrieved 4/27/2023
- ^ U.S. Department of Health and Human Services. TANF Final Rule, Retrieved 4/27/2023
- ^ GovLoans.gov. Stafford Loans for Students, Retrieved 4/27/2023
Write to Abby Erfe at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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