Navigating Financial Hardship: A Complete Guide from The Loan Center

What is the Financial Hardship Department scam? What do you do if you receive a scam email or call? Read more.

Gaetano DiNardi is a growth advisor to software companies like Docebo, Cognism, and Workvivo. As the former head of organic growth at Aura, Gaetano helped launch the companys SEO program. He has also written for publications like HBR, Fast Company, and Nasdaq.

Alina Benny is an Aura authority on internet security, identity theft, and fraud. She holds a bachelors degree in Electronics Engineering from the Cochin University of Science and Technology and has nearly a decade in content research. Twitter: @heyabenny

Experiencing financial hardship can happen to anyone due to job loss, medical bills, or other unforeseen life events. If you are facing money struggles, The Loan Center is here to help get you through these challenging times.

In this comprehensive guide, we’ll walk through what constitutes financial hardship, strategies to overcome it, and most importantly, what assistance and loan options The Loan Center provides for those facing financial challenges.

What is Considered Financial Hardship?

Financial hardship refers to a situation where your income has reduced substantially while your necessary living expenses remain the same or increase Some common causes include

Loss of a job or reduction in work hours
Significant medical expenses not covered by insurance
Loss of a spouse or family member’s income
Unexpected home or car repairs
Natural disaster or emergency that causes property damage

The result is you do not have enough money coming in to pay for essential needs like food, housing, transportation, medications, and utilities.

How to Know if You’re Experiencing Financial Hardship

Signs you may be undergoing financial hardship include:

Missing bill payments and accumulating late fees
Credit card balances rising each month
Accounts sent to debt collectors for non-payment
Receiving shutoff or past due notices for utilities
Not having enough money for basic living necessities
High debt relative to income

If this sounds familiar, you’ll need to take action to improve the situation.

Steps to Deal with Financial Hardship

If faced with money challenges, here are constructive steps to take:

Track spending – Review where your money is going and look for areas to cut back.
Communicate with creditors – Call to explain the situation and try to work out alternate repayment plans.
Sell assets – Consider liquidating cars, equipment, valuables or real estate to generate funds.
Consolidate debt – Combine multiple debts into a single lower payment through balance transfer or debt consolidation loan.
Use assistance programs – Research and enroll in government and nonprofit hardship assistance programs.
Find additional income – Take on a side job or freelance work to supplement earnings.
Build an emergency fund – Gradually set aside money to cover future unexpected expenses.

Handling financial hardship requires both short-term relief and long-term planning.

Assistance Programs Available for Financial Hardship

If you are struggling with bills and expenses, be sure to utilize hardship assistance programs available, including:

Mortgage assistance – Your lender may offer forbearance or modified repayment plans if you fall behind.
Student loan deferment – Federal student loans can be deferred in certain hardship situations.
Food stamps (SNAP) – This program provides funds each month to buy groceries.
Utility bill discounts – You may qualify for reduced home energy bills through LIHEAP.
Unemployment benefits – These offer income if you lose your job.
Temporary Assistance for Needy Families (TANF) – Cash assistance may be available for families in need.
Public health insurance – Medicaid and CHIP offer free or low-cost health coverage.
Food banks and pantries – Local programs provide free food and meals.
Rent and deposit help – Nonprofits can cover a portion of rent and security deposits.
Legal aid – Get free legal help with debt collection, garnishments and bankruptcies.

Check if you meet eligibility requirements for these financial hardship assistance options.

Types of Loans Available During Financial Hardships

In addition to assistance programs, The Loan Center provides tailored loan solutions for those facing money troubles, including:

Debt Consolidation – Combines multiple monthly payments into one overall lower payment for easier management.

Cash-out Refinance – Access equity in your home through refinancing to generate funds to cover bills.

Home Equity Loan – Lets homeowners borrow against available equity in the home.

Bad Credit Loans – Specialized loans for those with poor credit histories get you through short-term gaps.

Auto Title Loans – Use your paid-off car title as collateral for fast loan approval.

Payday Alternative Loans – Affordable short-term borrowing against future paychecks.

Peer-to-Peer Loans – Borrow from individual investors through P2P lending platforms.

Balance Transfer Cards – Shift credit card balances to a new card with a temporary 0% intro APR.

Personal Loans – Borrow a lump sum and make fixed repayments over a set term.

Talk to our financial hardship experts about finding the right borrowing option to overcome your money challenges.

What Facts Lenders Evaluate for Hardship Loans

When applying for hardship programs and loans, lenders will assess factors like:

Your prior credit history and score
Income from all sources
Length and stability of employment
Monthly housing expenses and debts
Reason and severity of your financial hardship
Value of assets if used as collateral

Having supporting documents ready on these aspects will help increase chances of loan approval despite current difficulties.

Questions to Ask When Selecting a Hardship Loan

If considering a loan to get through financial challenges, be sure to ask lenders:

What are your interest rates, fees, and repayment terms?
How quickly can I access loan funding?
Do you report to the credit bureaus?
Are there prepayment penalties if I repay early?
What loan amounts and terms do you offer?
Are there minimum credit score requirements?
Will I risk foreclosure or repossession if I default?
Are there alternatives I should consider like debt management plans?

Asking these key questions will ensure you select the best emergency loan or financial assistance.

Mistakes to Avoid with Financial Hardship Loans

When borrowing money amidst financial struggles, be sure to avoid:

Failing to read the fine print on interest, fees, and terms
Taking out more than you realistically can repay
Relying only on loans without also cutting expenses
Missing payments which leads to late fees and credit damage
Not comparing multiple lender options
Using high-cost loans like payday loans or auto title loans
Taking on additional credit card debt

With careful planning, loans can assist through periods of financial hardship without creating a deeper debt cycle.

Alternatives to Hardship Loans

Besides loans, also consider these alternatives to address financial challenges:

Requesting due date extensions, alternate payment plans, or forbearance from creditors
Working out a debt management plan through a nonprofit credit counseling agency
Asking creditors to lower or waive interest rates
Applying for emergency grants from churches, charities, or employers
Using crowdfunding campaigns through sites like GoFundMe to raise money
Withdrawing from retirement accounts like a 401k without penalty
Setting up payment plans with the IRS for back taxes owed

Evaluate these along with borrowing options when facing financial hardship.

The Bottom Line

Hardships happen, but with proper money management and support programs, you can regain financial stability. The Loan Center is here to help guide you through the process.

Let us help you identify assistance options, budgeting strategies, and responsible borrowing solutions tailored to your situation. Our financial hardship experts empower you to overcome money challenges and build a stronger financial future.

Frequency of Entities:
financial hardship – 14
loan – 10
lender – 5
assistance – 5
payment – 4
credit – 3

Predatory Debt Relief Scams Are Everywhere â Aura Can Help.

Scammers prey on people burdened with financial difficulties, and pose as representatives or organizations offering help. The most effective step that you can take to stay safe is to disregard unknown phone calls and emails.

If a message is legitimate or important, you can expect the caller to follow up by using a different contact method.

Should you find yourself spritzed with scam calls and emails, consider Aura. Aura monitors your identity and financial accounts, mitigating damage even if you become a victim of one of these schemes.Â

Every Aura plan includes three-bureau credit monitoring and advanced digital security toolsÂ â all complemented by $1 million in insurance coverage and 24/7 U.S.-based customer support.

Editorial note: Our articles provide educational information for you to increase awareness about digital safety. Auraâs services may not provide the exact features we write about, nor may cover or protect against every type of crime, fraud, or threat discussed in our articles. Please review our Terms during enrollment or setup for more information. Remember that no one can prevent all identity theft or cybercrime.Is this article helpful so far? Yes NoSkip

Need an action plan?

Look for signs of phishing

Phishing emails â ostensibly from the government, your bank, or even a coworker â are designed to steal your personal information. While scam emails closely resemble official emails from companies that you know and trust, there are often telltale signs.

How to tell if an email is from a scammer:

The senderâs âFromâ name and email address donât tally. Email scammers can update an email headerâs From, Reply-to, and Return-path sections to masquerade as âU.S. Department of Financial Hardships.â But, if you click on the senderâs name, it will reveal the actual email address that is being used to send the message. If the email address and name donât match, itâs a scam.
The message is sent from a free or consumer email address (Gmail, Yahoo, etc.). Legitimate government agencies use official, branded email addresses that end with .gov.
The message features mangled grammar or strange formatting. Messages and emails sent from actual government agencies undergo a certain level of appraisal before they are sent out. If youâre seeing strange errors, consider this a red flag.

National Financial Hardship Loan Center Offers $36,000 Over The Phone – Is It Scam Or Legit?

Should you apply for a financial hardship loan?

Applying for a financial hardship loan can be helpful if you need cash for credit card payments, mortgage payments, utility bills, living expenses, or unexpected medical expenses. The loan can provide you with the necessary funds to make ends meet.

Why do I need a hardship personal loan?

You may face financial difficulty for a number of reasons, such as a medical emergency, car repairs, or a job loss. Hardship personal loan programs are offered by many small banks and local credit unions. This type of loan tends to have low interest rates, low maximum loan amounts, and short repayment schedules.

Should you take out a hardship loan?

But for those who can’t access such resources, help may come in the form of a hardship loan, a type of loan offered to help people get through financial challenges, such as unemployment or medical debt. Taking out a hardship loan can offer the cushion needed until a person’s financial prospects brighten.

How do I get a secured hardship loan?

To get a hardship loan, you’ll typically have to prove that you are in financial difficulty. You’ll have to meet the lender’s specific requirements, which can include a minimum credit score requirement. What Happens If I Default on a Secured Hardship Loan?