Where Can I Get a Loan on Disability? Your Options Explained

You can get a personal loan when youre receiving disability benefits, provided you have enough income to qualify for the loan amount you want and you meet other eligibility requirements. For example, having good credit and a long history of paying bills on time can help you qualify for a loan regardless of where your income comes from—provided you can prove it.

The good news about applying for a loan on disability is the fact that you should have regular statements that can prove how much you receive in disability benefits and how often. Read on to learn what it takes to get approved for a loan while youre receiving disability benefits, how getting a loan can impact these benefits, and some alternatives to consider.

Living with a disability can present many financial challenges. Between medical bills, assistive equipment and everyday living expenses you may find yourself needing extra funds from time to time. But where can you turn if you need a loan but are receiving disability benefits?

I’ve consulted two helpful resources – an article from Rocket Loans and another from Forbes Advisor – to provide an overview of your loan options when disabled. Keep reading to learn where you can get a loan on disability, what types of loans are available, qualification requirements, and how borrowing could impact your benefits.

Understanding Disability Loans

To start, it helps to understand what people generally mean when referring to a “disability loan” There is no single loan product with that name Rather, it’s a broad term used to describe loans that disabled individuals take out for various purposes, including

  • Covering expenses while awaiting approval for disability benefits. Since it can take months to begin receiving payments, a personal loan can help pay for rent, food, utilities, etc. in the meantime.

  • Paying for disability-related costs not covered by insurance, like making home accessibility modifications, buying assistive devices and mobility equipment, paying for caretakers, etc.

  • Covering any other personal expenses that disability payments don’t cover, like car repairs, debt payments, etc.

So in essence, any type of loan can be considered a disability loan if you take it out while disabled or applying for disability benefits. The most common options are personal loans, mortgages, and auto loans.

Qualifying for a Disability Loan

Qualifying for a disability loan largely depends on the lender’s requirements. However, here are some key factors they commonly consider:

  • Credit score – Most lenders will check your credit report and score to assess your repayment risk. Those with very poor credit tend to get denied or offered higher interest rates.

  • Income – Lenders want to see you have enough steady income to make the monthly payments. For disability applicants, this often means Social Security disability income.

  • Debt-to-income ratio – Lenders calculate your DTI, or the percentage of gross income spent on debt payments. The lower your ratio, the better.

  • Collateral – Secured loans require an asset like a car or property to be put up as collateral. This gives the lender recourse if you default.

  • Co-signer – Adding a co-signer with better credit/income may help you qualify if you can’t meet requirements on your own. But co-signers are equally responsible for repayment.

While being disabled can’t disqualify you alone, having little income, poor credit, and no co-signer can make getting approved difficult. Specialized disability lending programs do exist, so be sure to research options in your area.

Types of Disability Loans and Lenders

As mentioned, common sources for disability loans include:

Personal Loans – Unsecured loans from banks, credit unions, and online lenders. Loan amounts range from $1,000 to $100,000 usually. Useful for covering any disability costs.

Mortgages – Home loans to finance a primary residence. Disabled veterans may qualify for specialized VA loans with discounted fees. Down payment assistance programs also available.

Auto Loans – Loans to purchase modified vehicles. Some lenders like Bank of America offer specialized auto financing for the disabled.

Government and nonprofit loans – State/federal agencies and nonprofits sometimes offer low-cost loans for home modification, assistive devices, and more. Eligibility requirements vary.

Research multiple lenders to compare interest rates and fees. Online lenders like Upstart and LendingClub offer easy rate-checking and applications. Banks and credit unions provide personalized service but may have stricter requirements. Nonprofits like Kiva offer 0% interest loans funded by charitable donors.

Impact on Disability Benefits

If you receive SSI or SSDI benefits, it’s crucial to understand how borrowing funds could impact your eligibility. Here are some key things to keep in mind:

  • Loans themselves don’t count as income for either SSI or SSDI. This means the funds themselves won’t disqualify you.

  • However, if you receive SSI, remaining loan funds above $2,000 could put you over the resource limit after the month you receive them. Carefully plan major purchases with loan funds to avoid this.

  • Defaulting on loan payments could impact your eligibility if it results in wage garnishment, putting you over the income limits. Make sure you can afford the monthly payments.

  • While not income itself, loan payments will reduce the amount of your disability benefits you have left over to live on. Make sure you factor this in.

Alternatives to Loans for Disabled Individuals

While loans allow you to access lump sums for major costs, they aren’t the only option. Here are some other resources to look into first:

  • ABLE accounts – Tax-advantaged savings accounts to cover disability expenses without impacting benefits.

  • Housing assistance – Federal and nonprofit programs to help with rental costs, utilities, and home modifications.

  • Food assistance – The SNAP program provides food stamp benefits to low-income disabled individuals.

  • Presumptive disability – SSA programs to receive temporary disability payments while awaiting a decision.

  • Family/friends – Ask trusted loved ones for small, interest-free loans before pursuing high-interest debt.

Only borrow when absolutely necessary. Exhaust other options first, create a repayment plan, and borrow conservatively. This will help you avoid jeopardizing your disability benefits.

The Bottom Line

Despite potential hurdles, getting a personal loan, mortgage, or auto loan while on disability is certainly possible if you have sufficient income, a decent credit score, and shop multiple lenders. Just be sure to first explore specialized disability lending programs, government and nonprofit assistance, and other alternatives before taking on interest-accruing debt obligations.

Above all, tread carefully and only borrow amounts you know you can realistically afford to repay on time each month. This will help ensure getting a disability loan improves rather than harms your financial situation. With some diligent planning and research upfront, you can make an informed decision and borrow wisely.

How Personal Loans Impact Disability Benefits

According to the U.S. Social Security Administration, applying for a loan will not impact your disability benefits. If you borrow money and spend it within that month, the loan proceeds will not count as income and will not affect your Supplemental Security Income (SSI). However, if you dont spend all the loan proceeds, that money will count toward your resource limit ($2,000 for an individual, $3,000 for a couple).

While with the SSI program, you must have a qualifying disability and meet income limits. The Social Security Disability Income (SSDI) pays benefits if you are “insured.” You must have paid enough Social Security taxes on your earnings to qualify, which means having worked long enough.

Can I Get a Personal Loan While on Disability?

You can get a personal loan while on Social Security Disability Insurance (SSDI), provided you meet the eligibility requirements put in place by your lender. These can include a minimum credit score, a maximum debt-to-income (DTI) ratio, a minimum income, and more.

Mortgages with Disability Income


Can people on disability get a personal loan?

You can get a personal loan while on disability if you meet the lender’s criteria. For the most part, this means having a good credit score and a reasonable DTI ratio and proving you can repay the amount you want to borrow with your income, including SSDI. Remember to compare lenders carefully before you apply.

What is a hardship loan?

What Is A Hardship Loan? A hardship loan is a type of financing that helps people dealing with a financial crisis caused by an emergency expense or an income shortfall. You can use a hardship loan to cover everything from a surprise medical or car repair bill to necessities like food and rent.

How to get a free loan from Social Security?

Social Security will not give you a loan or let you borrow against your future benefits. You can’t, for example, ask to borrow $5,000 and then simply have Social Security deduct that sum from your benefits once you start collecting them.

What kind of loan can I get on SSI?

You can take out a personal loan while receiving Social Security benefits. The loan proceeds will not affect Social Security retirement benefits. However, if you’re receiving Supplemental Security Income (SSI) from Social Security, any loan proceeds you don’t spend could count against you and reduce your benefits.

Where can I get a loan on disability?

You can get a loan on disability anywhere that offers personal loans as long you meet the lender’s loan qualifications. Numerous banks, credit unions and other lenders offer personal loans. If you have limited mobility, you can apply for a loan from the comfort of your home by using an online lender.

How do I get a personal loan if I have disability?

If you’re receiving disability benefits, applying for a personal loan is the same as for anyone else. Compare lenders. Start your search by comparing lenders, including online lenders and your local bank or credit union. Do a prequalification to see if you qualify for a loan before applying and doing a hard credit check. Apply for a loan.

What is a disability loan?

A disability loan isn’t a specific type of loan, but it’s a personal loan used to cover various costs. For those who are disabled, a personal loan can be helpful in situations that require: Covering costs before receiving disability benefits: A personal loan can pay for living expenses before you’re approved for disability payments.

Should I get a personal loan if I’m disabled?

For those who are disabled, a personal loan can be helpful in situations that require: Covering costs before receiving disability benefits: A personal loan can pay for living expenses before you’re approved for disability payments. These living expenses may include groceries and/or housing.

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