Can I use a Debt Consolidation Loan if I’m on Public Assistance?
For many people experiencing hard financial times, public assistance can be extremely valuable. Without it, many people would have no other way to pay for food, shelter, and health care. Unfortunately, it’s very common for people who are on programs such as SNAP and TANF to have debts that they need help paying off. While there is no government program that will help people pay off their credit card bills, there is a way to reduce your monthly payments.
How a Debt Consolidation Loan can help
Debt consolidation is a way to take the debts that you are currently paying and get them paid off all at once. Instead of juggling potentially dozens of different bills each month, a debt consolidation loan makes it possible to just pay one loan. Furthermore, the amount you’ll pay will be lower than the total amount of your current loans. For many people, the hundreds of dollars a month that they can save through a debt consolidation loan can be the difference between getting by and having to declare bankruptcy.
Unfortunately, too many people assume that they will not qualify for a debt consolidation loan because they are on some form of government assistance. In fact, it’s true that this is one of the few types of financial products that are readily available to people on public assistance.
During the process of debt consolation, every applicant works with a debt counselor who reviews his or her personal financial situation. This review ensures that every applicant gets a loan that meets their financial needs. When working with your debt counselor, make sure to tell them everything you know about your assistance. If there is a possibility that you will be cut off from benefits before the consolidation loan is paid off, then you must alert your counselor so that he or she can find a loan that will enable you to make benefits even on a reduced income.
Because debt consolidation loans are handled through private lenders, it does not matter if an applicant is receiving federal or state aid. Many private lenders view government benefits as a steady source of income, making it possible for people on benefits to qualify for good interest rates and favorable loan terms. Because every financial situation is different, however, it’s important to contact a debt counselor and discuss your options.