The Hartford Relief Hardship Recovery Loan can help cover an unexpected expense quickly and affordably, especially if you don’t have sufficient savings saved up or haven’t begun building one yet.
Hardship programs may also help your credit score, especially if you manage your card debt responsibly and maintain low utilization levels. However, options will differ depending on which lender is available.
The Benefits of a Hardship Loan
Financial hardship occurs when life events present unexpected financial obstacles that make meeting debt repayment obligations and meeting basic expenses difficult. Financial institutions offer programs such as hardship personal loans to help alleviate such challenges.
Hardship loans provide an alternative to credit card debt and other sources that require collateral, with lower interest rates and shorter repayment terms than their competitors. Many hardship loan programs also provide prequalification so you can see if you qualify without damaging your credit score.
However, applying for traditional personal loans may hurt your credit score and report. When applying for private or hardship loans, evidence must be provided as proof of income and finances, typically including pay stubs, bank statements, and tax returns. It may still be possible to qualify for personal loans even if unemployed, though it will be more challenging.
Credit unions also provide financial hardship assistance for their members. Their credit counselors can prepare a budget to present to creditors as evidence of how much you can afford per month, giving them insight into how much credit limit reduction or cessation might be possible.
However, financial hardship assistance will not provide a simple solution to your problems. Deferring debt repayments won’t ease the hardship and may leave you worse off by incurring additional debt to make payments. Instead, it may be more beneficial to reach out directly to creditors and ask if they’ll temporarily suspend payment terms; some credit card companies offer programs that allow hardship-proofing by providing proof of income through documents like paychecks or tax returns.
How to Determine if You’re Eligible
Are You Eligible for a Hardship Loan? That depends on two things: Your financial situation and your ability to repay. Many lenders require that you have a source of income such as a steady job, alimony/child support payments, unemployment benefits, or retirement income as a requirement before accepting you as a borrower; some will take rental property income or passive investments as alternative forms of income as sources for repayment if necessary. If in doubt about eligibility, it is best to contact the lender directly and inquire further into their requirements.
If you have credit card debt, aim to make at least the minimum payment and work out an appropriate repayment plan with your card issuer. Perhaps they offer special deals such as low-interest rates, waived late fees, or lengthened repayment terms to help you get back on track with payments. Alternatively, consider getting a personal loan from a local bank or credit union; these may offer better terms than online lenders, and it may even be possible to prequalify for loans without harming your credit score.
Hardship grants offer another solution for those struggling to meet mortgage or credit card payments, providing much-needed breathing room while you focus on repaying debts. While federal grants may only be awarded to state and local governments, law enforcement agencies, colleges/universities/research labs/nonprofit organizations, there may also be private grants available for individuals experiencing financial hardship.
Finally, contact your mortgage servicer and see if they offer COVID-19 hardship forbearance options. Most servicers – both federally backed and otherwise – should be able to provide help during times of hardship with forbearance agreements.
Before taking out any financial relief, it’s essential to weigh its advantages and disadvantages carefully. Before considering taking out a hardship loan, try cutting costs by cutting unnecessary spending habits or making intelligent spending choices, and if this still leaves you struggling to meet monthly obligations, consult a certified credit counselor for advice.
How to Apply for a Hardship Loan
If you are experiencing financial challenges due to a natural disaster or another unanticipated event, a hardship loan could provide much-needed assistance. Before applying for one, though, it is wise to thoroughly research all available loan options and their terms and conditions before making your final decision.
Hardship loans are unsecured, which allows lenders to assume more risk. Because of this increased exposure, higher credit scores may be necessary to be accepted as qualifying a hardship loan vs. traditional personal loan applications.
Personal loans for hardship can be found online through various websites; however, you should compare offers from multiple lenders before making your decision when selecting lenders that specialize in this form of financing, such as banks or credit unions that specialize specifically in personal hardship loans. Small banks and credit unions that specialize are more likely to provide competitive terms than larger lenders; some even allow prequalification without impacting credit score – saving time when it comes to application.
Consider approaching companies you owe money to and asking if they will allow you a break during financial difficulty. Many credit card, utilities, mortgage lenders, and cell phone providers may be more than willing to suspend or reduce payments during times of hardship temporarily; this may help ease some of the stress caused by sudden financial crises and provide more time for paying off debt long term.
Only you can decide if a hardship loan is right for your situation. While its advantages can be significant, it is still essential to carefully consider how and when you will repay the loan and your longer-term financial goals and goals for repayment. A personal loan with longer repayment terms might make sense if your plan is covering ongoing expenses.
If you need assistance managing your finances or have questions regarding hardship loan eligibility, the Hartford Employee Relief Fund provides confidential advice and support. It is a tax-exempt charitable organization reliant upon individual donations for funding to aid employees experiencing unexpected hardship.
What to Expect from the Process
No matter whether you are a homeowner or a business owner, there are various avenues available to provide financial relief from COVID-19 pandemic costs. From the recently passed CARES Act and local and state initiatives to other forms of relief – there may be options to assist financially! It is worth taking the time to explore all your available options when seeking relief financially.
Homeowners can benefit from the CARES Act’s grant assistance for mortgage payment relief and other housing expenses. It can assist you with either current mortgage payments, future payments, or non-escrowed real estate taxes such as condo association fees and municipal tax liens. Homeowners can apply for up to $30,000 in grant assistance, which will be paid directly to their servicer or debt holder.
The Hartford Employee Relief Fund offers employees experiencing financial difficulty due to the pandemic another option for assistance. Funded mainly through individual employee donations matched by The Hartford, this program provides financial support to fellow workers in need. Applying for a Hartford Employee Relief Fund hardship loan is easy.
Small businesses in Hartford can find relief through the Small Business Emergency Assistance Grant Program. This grant assists critical expenses like lease or mortgage payments, rent payments, vendor payments, payroll costs, and taxes. Grant funding comes courtesy of Hartford Foundation for Public Giving (HFPG), HEDCO Inc (HEDCO Inc), and Capital for Change with additional support from the City of Hartford.
Personal loans can help improve your credit score as long as they’re used responsibly to pay off credit card debt, provided they don’t exceed spending limits, close an account, or decrease credit limits – but that shouldn’t dissuade anyone from turning to this form of relief if financial hardship hits hard.
