If you lost your job or if you have a sudden decrease in income or an increase in out-of-pocket family health care expenses, we can help. Read this page to find out how to request help with current VA copay bills or an exemption from future copays.
Financial hardship can strike anyone at any time. A job loss, medical emergency, or major home repair can upend even the most financially stable household. When an unexpected expense arises, many Virginians struggle to pay their bills on time or even keep food on the table. Financial hardship loans may provide a lifeline during tough times. Let’s take a closer look at what financial hardship loans are, who offers them in Virginia, eligibility requirements, and how to apply.
What Are Financial Hardship Loans?
A financial hardship loan provides emergency funds to individuals facing financial challenges from unemployment, medical debt, caregiving costs, or other crises Hardship loans offer a lump sum of cash on flexible terms so borrowers can pay necessary expenses during the hardship period
The loan funds can cover:
- Rent or mortgage
- Past due bills
- Everyday costs like groceries and transportation
- Medical expenses
- Childcare
- Other pressing needs
Unlike payday loans with extremely high interest rates, legitimate hardship loans charge reasonable interest and fees. The loans give borrowers time to get back on their feet financially.
Types of Financial Hardship Loans in Virginia
Virginians have several options when it comes to financial hardship loans:
- Personal loans – These unsecured loans provide lump sums for any use, with fixed monthly payments and terms up to 7 years. Average personal loan amounts range from $1,000 – $50,000.
- Employer hardship funds – Some employers offer grants to employees facing crises like medical bills or damage from natural disasters. The assistance is usually limited to a few thousand dollars.
- Peer-to-peer lending – Borrowers are matched with individual lenders through an online platform. Loan amounts and terms vary.
- Retirement plan hardship withdrawal – Individuals can take hardship withdrawals from 401(k)s or IRAs, though taxes and penalties usually apply.
- Home equity loans – Homeowners can tap home equity to get lump sums, but risk foreclosure if they can’t repay the debt.
- Government and nonprofit programs – Federal, state, and local programs provide hardship grants or loans in certain situations. Nonprofits also offer assistance.
Of these, personal loans and retirement plan withdrawals are the most accessible options. Homeowners can also easily access home equity. The rest have extensive eligibility requirements.
Who Offers Financial Hardship Loans in Virginia?
Many national and local lenders in Virginia offer personal loans, including:
- Banks like Wells Fargo and Bank of America
- Online lenders like LendingClub and SoFi
- Credit unions like Apple Federal Credit Union and Virginia Credit Union
- Retail lenders like BestBuy and Marcus by Goldman Sachs
Most 401(k) and IRA providers permit hardship withdrawals as well, And government agencies like the Virginia Housing Development Authority give hardship support to qualified residents,
Some top places to look for hardship loans in Virginia are:
- SoFi – personal loans from $5,000 – $100,000
- Wells Fargo – $3,000 – $100,000 personal loans
- PayPal Credit – loans up to $99,000
- Virginia Housing – grants up to $30,000 for mortgage relief
- Virginia Individual Development Accounts – matches up to $4,000 in savings for expenses like medical bills or car repairs
Credit unions and peer-to-peer lenders like Upstart and Prosper also offer personal loans to Virginians facing financial challenges.
Am I Eligible for a Virginia Financial Hardship Loan?
Eligibility for financial hardship loans varies by program, but lenders generally evaluate:
- Income – Most require steady income to repay the loan. Retired people or those on government benefits may qualify.
- Credit scores – Minimum scores between 600 – 700 are typical, though some lenders go lower.
- Debt-to-income ratio (DTI) – A lower DTI percentage improves chances of approval. Many lenders cap debt ratios around 50%.
- Assets – For home equity loans, lenders check that you have sufficient home equity.
- Employment status – Lenders often require full-time employment. For peer-to-peer loans, steady part-time income may be acceptable.
- Reason for hardship – Documentation proving loss of job, medical bills, etc. boosts approval odds.
Meeting bare minimum standards gets your foot in the door, but exceptional credit and income make approval more likely and can result in lower interest rates.
How Do I Apply for a Hardship Loan in Virginia?
Applying for a financial hardship loan involves:
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Choosing a lender – Research options and select a lender that matches your credit profile and loan needs. Credit unions often offer the lowest rates.
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Checking loan eligibility – Use online tools to see available loan amounts, rates, and terms for your credit score.
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Completing the application – Apply online or in person. Supply information on income, employment, assets, debts, and reason for loan.
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Providing documentation – Have pay stubs, tax returns, hardship evidence, and other documents ready.
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Accepting the loan terms – If approved, e-sign the loan agreement after carefully reviewing interest rates, fees, and repayment details.
The entire process from application to funding can take anywhere from one day to a few weeks. Once approved, the lender deposits the loan amount directly into your bank account.
What Should I Know Before Getting a Hardship Loan?
While hardship loans offer temporary financial relief, borrowers should understand the risks, such as:
- Interest costs – Loans aren’t free money. The interest charges add to the total repayment amount. Make sure the rate and fees are reasonable.
- Credit score impacts – Too many loan applications in a short timeframe may lower your score. But making on-time payments can improve it.
- Prepayment penalties – Personal loans don’t have these fees, but home equity loans sometimes do.
- Foreclosure risk – Failure to repay home equity loans could result in losing your house.
Shop around, compare interest rates and fees, borrow only what you need, and commit to making the monthly payments. Used strategically and sparingly, a financial hardship loan can stabilize your situation without damaging your finances long-term.
Final Thoughts
Hardship loans aren’t the right solution for everyone. But when a temporary setback threatens your financial stability, they provide a reasonable way to get emergency funding. Do your research, understand the risks, borrow conservatively, and have a plan for repayment. This approach helps ensure that a hardship loan acts as a life raft during the storm rather than an anchor that weighs you down.
What challenges have you or your family faced that required a financial hardship loan? Please share your experiences and advice in the comments below!
Option 1: Request help to get debt relief
If you don’t think you can pay your copay bills, you can request help.
You can request one of these types of debt relief:
- Request a waiver for all or part of your balance. If we accept your request, we’ll stop collection and forgive your debt.
- Make a compromise offer. If we accept your offer, we’ll agree on a smaller, one-time payment to resolve your debt.
If we accept part or all of your request, you won’t have to pay the amount of the balance we agree to relieve.
You can request debt relief for copay bills online now.
You can also request debt relief by mail or in person.
Fill out a Financial Status Report (VA Form 5655).
Write a letter describing the financial issues that make it hard for you to pay your copay debt. If you want to request a hearing to help explain your financial issues, include this request in your letter.
Submit your completed form and supporting letter to the business office or health administration office at your nearest VA medical center.
What can I do if I can’t afford to pay my current VA copay bills?
You can request either of the 2 financial hardship assistance options on this page, depending on your situation. To avoid late charges, including interest and other fees, you’ll need to take action within 30 days of receiving your bill.
Get VA Financial Hardship Assistance |Veterans|Repayments|Debit Relief|Future Copays|
FAQ
What does the VA consider a hardship?
What is the emergency assistance program in Virginia?
What is 211 used for in Virginia?
What is a hardship loan?
A hardship loan doesn’t have an official definition, but many personal finance institutions may offer their own version of hardship loans. At its core, a hardship loan is a loan that can help you get through unexpected financial challenges like unemployment, medical bills, or caregiving responsibilities. What Can You Use a Hardship Loan For?
Should you get a hardship loan?
A hardship loan could overwhelm already strained finances, however. Debt in any form will have to be repaid eventually, with interest, even in the case of hardship loans. When you’re experiencing financial difficulties, you may feel the need to make a quick decision.
What is the Virginia mortgage relief program?
The increase is an expansion of the Virginia Mortgage Relief Program, an initiative launched by former-Governor Northam’s administration on Jan. 3, 2022 to aid homeowners experiencing financial hardship due to COVID-19.
What is considered financial hardship?
Financial hardship could include an increase in living expenses, childcare, change in household size, job loss or reduction in income, etc. The information above is based solely on information available at the time of publication. Please visit the state program online for details, updates, and terms.