Navigating Financial Hardship with a Unity Savings Hardship Loan

Experiencing financial hardship can happen to anyone When an unexpected life event leads to reduced income or increased expenses, it can quickly put you in a difficult financial situation As stressful as it is, remember that you have options and there are resources available to help you get through tough times. One potential option is taking out a hardship loan from your credit union. Below, we’ll explore how Unity savings hardship loans work, who they can benefit, and tips for managing the loan responsibly.

What is a Hardship Loan?

A hardship loan is a type of personal loan designed for people going through a temporary financial hardship It provides quick access to cash that can help cover essential living expenses or pay off more expensive debt when your income takes a hit

Hardship loans are often easier to qualify for compared to standard personal loans if you have little savings or less-than-perfect credit Credit unions like Unity savings understand that anyone can fall on hard times through no fault of their own They want to help members get back on stable financial ground,

Common Situations Where a Hardship Loan Can Help

Here are some of the most common scenarios where a Unity savings hardship loan can provide relief:

• Job loss or reduced hours: If you lose your job, get furloughed, or have your hours/wages cut unexpectedly, a hardship loan can help bridge the gap until you find new employment or resume normal hours.

• Medical emergency: An injury, illness, or hospitalization can mean piling up medical bills along with lost income while you recover. A loan provides funds to help cover treatment costs and daily living expenses.

• Death in the family: The loss of a spouse or family member brings grief along with potential funeral expenses and a sudden reduction in household income. A hardship loan can assist with these monetary burdens.

• Car repairs: If your vehicle breaks down unexpectedly, a loan may help you pay for expensive repairs to retain your transportation to work.

• Escape domestic violence: Individuals leaving an abusive relationship may need funds to get into safe housing until they can support themselves.

• Other unexpected crisis: Hardships can take many forms, like a natural disaster destroying your home or the pandemic shutting down your industry.

The common thread is an unanticipated event leading to reduced income or high expenses at a time when savings aren’t available to cover the gap. A hardship loan can provide temporary relief.

Benefits of a Unity Savings Hardship Loan

There are several advantages to choosing a hardship loan from Unity savings versus other financing options you may struggle to qualify for when funds are low.

1. Available with bad credit or limited credit history

Since Unity savings is a credit union, it can take a more holistic view of your situation instead of looking only at your credit score. They may approve you based on past relationship history versus strict scoring criteria.

2. Lower interest rates

With poor credit, you often face very high interest rates over 20% from predatory lenders. But Unity savings offers more reasonable rates between 9.9% to 24.9% based on your creditworthiness.

3. Member-focused

As a member, Unity savings wants to see you overcome temporary hardships. Their loan officers can guide you through customized solutions.

4. Quick access to funds

You could get approved and receive funds in your account within a day or two. This rapid turnaround lets you cover urgent costs immediately.

5. Fixed payments

The loan terms establish a fixed monthly payment over 1 to 7 years. This consistency helps you budget when income is tight.

6. Improve credit

Making on-time payments shows financial responsibility and helps boost your credit score over time.

What Are the Requirements to Qualify?

To qualify for a Unity savings hardship loan, you’ll need to provide information to verify:

• Identity
• Household income
• Employment
• Assets/debts
• Reason for hardship

Any documentation related to loss of job, medical emergency, etc. can strengthen your case for approval. The credit union will perform a credit check but may offer more flexibility than traditional lenders when looking at your credit history.

They also consider your relationship with Unity savings, like how long you’ve been a member and past accounts or loan history. Maintaining savings and responsibly managing past loans can demonstrate you’re a trustworthy borrower, boosting your chances of approval.

Tips for Managing Your Hardship Loan

If you get approved for a Unity savings hardship loan, be sure to borrow only what you need and can realistically repay. Make payments on time to avoid fees and delinquency. Communicate any ongoing hardships with the credit union early to explore options like deferment.

Here are some other tips for managing your loan to minimize stress:

• Pick the shortest term you can afford – Opt for a 12-month loan over a 60-month loan if possible. You’ll pay less interest over the life of the shorter-term loan.

• Pay more than the minimum – Any extra you can apply to the principal monthly will reduce interest and pay off the balance faster.

• Avoid missed payments – Set up autopay or calendar reminders for your due date. A 30-days-late payment can tank your credit score recovery.

• Lower other expenses – Cut back discretionary spending during your hardship to dedicate more to loan payments.

• Track your spending – Use a budgeting app to see exactly where your money is going each month. Identify areas you can cut back.

• Communicate with the lender – Transparency about ongoing hardships can lead to assistance like delayed payments if needed.

Alternatives to High-Interest Hardship Loans

While a Unity savings hardship loan has benefits like favorable rates and terms, you may prefer to seek other forms of assistance first before taking on debt. Here are a few options to consider:

• Request an advance on your paycheck from your employer if possible.

• Apply for government assistance like unemployment benefits, food stamps, or Medicaid.

• Search for local nonprofits that offer emergency financial help or grants.

• Borrow from family or friends informally at little to no interest.

• Use low-interest options like a 401k loan or credit cards with introductory 0% APR offers.

• Try crowdfunding your need through platforms like GoFundMe if you have an urgent, discrete expense.

• Liquidate assets you no longer need, like a second car, jewelry, electronics, etc.

• Negotiate bills, like lowering cell phone costs or delaying mortgage payments temporarily.

The right option depends on your specific situation. Avoid predatory payday loans at all costs, as their 200%+ interest rates create an endless debt cycle.

When Are Hardship Loans a Bad Idea?

While hardship loans serve an important purpose, they aren’t the right choice in every hardship scenario. You should probably avoid them if:

• You don’t have a clear plan for repayment.
• You need more than what you can realistically afford to repay.
• You have other options like family help available.
• Your hardship situation is unlikely to be temporary or resolved soon.
• You expect your income to keep declining.
• You’ve defaulted on prior loans or debts.

In these cases, taking on additional debt will only worsen your financial distress. Explore other assistance paths or work with a non-profit credit counseling agency.

Get Through Tough Times with Unity Savings Support

Hardship can strike when you least expect it. But your credit union wants to help you get back on track financially after an unexpected crisis.

Unity savings hardship loans provide reasonably priced financing that can bridge short-term income gaps. They offer a lifeline to cover essentials when you have poor credit or minimal savings. Follow the tips above to manage the loan responsibly so it aids your financial recovery.

With empathy and member support, Unity savings can guide you through turbulent times. Don’t hesitate to talk to one of their financial experts for customized hardship assistance. They can help you weigh the prudence of a hardship loan versus alternatives. Together, you can make a plan to regain stable financial footing, both today and in the long run.