Welfare doesn’t make you ineligible for all loans. Here’s how to compare your options for borrowing money.
Welfare recipients have unexpected expenses, just like anybody else. And they may need to take out loans from time to time.
If you’re currently on welfare, you may wonder if you’ll be able to get a loan. The good news is that you can. In this guide, we explore the types of loans you may be eligible for and how you can get them.
Does being on welfare affect my credit?
Being on welfare doesn’t affect your credit. Credit bureaus are not notified when you apply for welfare, and by law they’re not allowed to include welfare benefits when calculating your credit score.
As with any loan, you’ll have a better chance of receiving one if you have good credit. There are still loan options if you have poor credit, but the terms will not be as favorable — you will receive higher interest rates, for example.
If your credit currently is not where you want it to be, consider rebuilding it with a secured credit card.
How income affects your ability to get a loan
You won’t be barred from getting a loan just because you’re receiving welfare income. Some lenders may not accept welfare income, but many others will.
More likely, the bigger issue is that your income is limited while you’re on welfare. Lenders want to see that you have low debt relative to your income, and this may make it more difficult to get a loan. However, if you search widely enough, you should be able to find a lender that will work with your current income.
Which lenders accept applicants with alternate income?
| Provider | Generally accepted | Conditions |
|---|---|---|
| ACE Cash Express |  | Full application determines whether it’s acceptable or not. |
| Advance America | | Full application determines whether it’s acceptable or not. |
| CashNetUSA |  | Benefits count as an acceptable source of income. |
| Cash Central | | Retirement pensions and Social Security benefits count as an acceptable source of income. |
| Check City | | Varies based on state laws. |
| Check into Cash | | Varies based on state laws. |
| LendUp | | Varies based on state laws. |
| LendYou | | Full application determines whether it’s acceptable or not. |
| OppLoans | | Fixed income is accepted, but not preferred. |
| Provider | Generally accepted | Conditions |
|---|---|---|
| ACE Cash Express | | Must show proof of income. |
| Advance America |  | Must show proof of income, requirements vary by state. |
| CashNetUSA | | Must show proof of income, requirements vary by state. |
| Cash Central | | Must show proof of income, requirements vary by state. |
| Check City | | Must show proof of income, requirements vary by state. |
| Check into Cash | | Must show proof of income, requirements vary by state. |
| LendUp | | Must show proof of income, requirements vary by state. |
| LendYou | | Must show proof of at least $1,000/month income, requirements vary by state. |
| OppLoans | | Must be employed for 3+ months and receive paychecks via direct deposit. New Mexico does not require direct deposit. |
| Provider | Generally accepted | Conditions |
|---|---|---|
| ACE Cash Express | | Must not currently be a debtor in bankruptcy or intend to voluntarily file for bankruptcy. |
| Advance America | | Full application determines whether it’s acceptable or not. |
| CashNetUSA | | Discharge from bankruptcy is acceptable. |
| Cash Central | | Full application determines whether it’s acceptable or not. |
| Check City | | Bankruptcy that’s been discharged for 30 days is acceptable. |
| Check into Cash | | Full application determines whether it’s acceptable or not. |
| LendUp | | Full application determines whether it’s acceptable or not. |
| LendYou | | Full application determines whether it’s acceptable or not. |
| OppLoans | | Discharge from bankruptcy is acceptable. |
What to watch out for
You may desperately need a loan, but consider your ability to repay it. Carefully check the terms given to you by any lender before you sign an agreement. Many unscrupulous lenders target low-income individuals and welfare recipients, trapping them with expensive loan repayments.
We’ve included car title loans and payday loans in our following list of loan options. While they are options for you to consider, remember that these types of loans are notorious for sky-high interest rates. It’s not uncommon to see three-digit APRs — like 400% APR.
By contrast, the average APR for a personal loan is around 11%. Even if you have bad credit, the average APR for a personal loan is around 28%.
Also watch out for fees. Some personal loans, for example, often come with origination fees, which you pay before receiving your loan. Lenders may bury fees in the fine print. Read the loan terms in full so you’re not surprised later by unexpected payments.
Personal loans you can apply for
- If the provider quotes a different rate to the one above please let us know
Loan options for welfare recipients
It’s time to look for a lender that accepts your level of income and credit score. Carefully read a lender’s terms before signing anything, and be willing to walk away if the interest rate or fees are too high.
Peer-to-peer lending
With peer-to-peer (P2P) lending, you borrow money from another person. P2P lending networks facilitate loans by matching borrowers and lenders. Applications tend to be simpler, and you’ll often find interest rates that are lower than those at your local bank.
For a few P2P lending networks to start your search, try Prosper Marketplace or Lending Club.
Get matched with a lender for a personal loan
Through online resources like LendingTree and Zippyloan, you can enter your personal details to get matched with a lender who fits your credit and income profile. Check with your lender to see if they accept welfare income.
Banks or credit unions
Your bank or credit union may be willing to give you a loan if you’ve been a longtime customer without any blemishes on your financial history.
Consider online banks as well, which may offer lower interest rates.
Car title loan
With a car title loan, you put your car up as collateral — meaning if you fail to pay your loan, the lender can repossess your car.
You can get this type of loan with bad or nonexistent credit, and income verification is typically minimal.
However, car title loans are known for extremely high interest rates.
Payday loan
A payday loan is usually given for a small amount, and you typically pay it back when you receive your next paycheck. Some payday loan companies accept welfare checks as an income source.
However, as with car title loans, watch out for high interest rates that could dig you deep into debt.
Payday loans you can apply for
- If the provider quotes a different rate to the one above please let us know
Next steps
Online loan sources are great options, and we recommend pursuing those first. When you find a lender that might be right for you, take the time to understand the agreement you’ll be entering into.
Once you’re satisfied with the fees and interest rate, sign the loan terms. You should receive the loan in your bank account within one or two business days.
Frequently asked questions
Why might I not want to pursue a title loan or payday loans?
These types of loans typically come with extremely high interest rates. They offer the satisfaction of receiving money quickly, but often load borrowers with crushing repayment terms. They also tend to come with hidden rules that are terrible for borrowers. Avoid these loans, if you can.
Why is credit important when applying for a loan?
Your creditworthiness is a quick way for lenders to determine your ability to repay your loan. They use it to assess how risky it is to let you borrow money. The higher your credit score, the less lenders are willing to charge you for a loan — in other words, they’re willing to give you lower interest rates.
How do resources like LendingTree and Zippyloan make money?
These services are paid commissions for referring you to the right lenders.
What is a secured credit card?
To receive a secured credit card, you agree to put down an initial deposit, which protects the lender if you default. The amount you deposit is used as your credit limit. Secured cards are useful because you don’t have to have great credit to obtain them.
What information do I need to give when applying for a loan?
You should have your personal information ready — your phone number, email address, home address, driver’s license number and Social Security number. You’ll also need to provide bank account information and employment details.
If approved for a loan and you receive welfare but have only that card account how do u receive loan without an actual bank account?
Hi April,
Thank you for your inquiry.
Typically, You should receive the loan in your bank account within one or two business days. If you don’t have an actual bank account it would be nice to coordinate with the lender directly to check the available options for you.
I hope this information has helped.
Cheers,
Harold
I’m on ssi and have bad credit what will be the best loan in my case
Hi Gladys,
Thanks for your question.
The lenders on this page may consider you for a loan.
You may want to get in touch with the lender you are interested in, to discuss your eligibility given that you are on SSI.
Cheers,
Anndy