Financial Hardship Loans

Not everything in life goes as planned. You may have been going with your life smoothly, having a secure job, and paying your bills in time, then suddenly everything went out of hand.

Because life can be unpredictable, many services offer helping-hands for those who are in need. Continue reading for all you need to know about financial hardship loans and other solutions that can pull you out of your financial whirlpool.

What’s a Financial Hardship?

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Generally speaking, you’re considered in financial hardship when you can’t keep up with your bills and monthly payments or just can’t make ends meet.

Suppose you have many micro traditional loans and debts under your name, and an unexpected event deprived your resources and prevented you from paying on time. In that case, you become eligible for a financial hardship loan bad credit Australia or assistance (if you are wondering how do personal loans work).

The unexpected events include but not limited to:

  • Loss of a job
  • A significant cut in hours or pay 
  • Domestic violence 
  • Financial abuse
  • Medical illness or surgical procedure
  • Divorce 
  • Death of a spouse or a family member
  • Effects of a natural disaster like floods, hurricanes, storms, etc.
  • Gambling

How to Get Through a Financial Hardship

If you’re affected by any of the events mentioned above while being flooded with debts and bills, you can do one of the following:

Take Out a Financial Hardship Loan

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Strictly speaking, there are no specific no credit settlement loan that go by the name “financial hardship loans.” Yet, there are personal loan packages designed for those struggling to make payments on time due to out-of-hand personal circumstances. 

They are advertised under various names, such as hardship loans for the unemployed and those affected by COVID 19. 

You can take out such no credit check loan from banks, credit unions or private lenders, and depending on your situation, the terms and rates will be determined. It’ll help you whether you want fast cash to cover the repayments of other debts or just want a loan to pay for an emergency (unlike gambler loans). 

Usually, lenders offer more forgiving terms in financial hardship situations than in normal circumstances. For instance, they might agree to delay your first payment for 2-3 months until your financial situation improved and you’re back on your feet again. 

This may be enough time for you to pay the urgent bills and find another job or establish another source of income. 

Other than that, the terms are pretty similar to standard unsecured personal quick loans Australia. The interest rates fall between 3% to 18%, depending on your credit score and financial history and the repayment terms range from 12 to 36 months. You won’t be obliged to offer any assets as collateral, and the loan’s amount can be anything from $1500 to $5000. 

Before you’re granted the needy loan, the lender will require a soft credit check to make sure you’ll be able to repay on time. If you’re willing to provide the lender with a written document describing the reason behind seeking a guarantor loans, it’ll improve your chances of getting lower rates and more convenient terms. 

Ask for Hardship Assistance

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A piece of information that many Australian citizens don’t know is that if you take out a small loan, whether it’s a car loan, mortgage or student fund, and your circumstances change, you have the right to request a repayment arrangement. Many lenders offer this service in the form of a hardship variation or financial hardship program.

In short, you change the plan you priorly agreed on to suit your new financial situation. Lenders may agree to reduce your payments, delay your due dates or temporarily pause your payments without penalty. 

To be deemed eligible for easy payday loans, you’ll need to provide the lenders with a reasonable cause for your inability to pay back on time. Also, they’ll request legal documents to support your reasons, be it the hospital bills for your medical emergency, divorce papers, or employment termination letter.

After accepting your application, they’ll develop a new plan with the help of the information you give them, including your current income, expenses, debts and how much you can afford to repay every month. 

Make sure to pay attention to all the terms and conditions in the new arrangement to be able to keep up with the payments. Also, check if there are any fees that’ll be incurred as a part of the agreement and whether you’ll be required to pay a lump sum at a certain point. 

Get Financial Help!

Having a financial hardship isn’t something that many people feel comfortable talking about, especially when they need to apply for seniors loans. You may feel that talking to your creditors or seeking help in this situation may worsen your image in front of them and, in turn, worsen your case. 

However, you should know that as an Australian citizen, you have legal rights even in such challenging circumstances.

Taking out a financial hardship loan or seeking financial help for your overflowing debts can be the right step to take to solve your problem. If you need payday loans online Australia, apply with Perfect Payday today.

If you’re still not sure, the National Debt Helpline can provide you with ideas about how to manage your debts. Also, the Department of Human Services can give you suggestions to improve your financial situation.

About the Author

Lucy has over a decade of experience in finance. She is currently the content curator here at Perfect Payday.

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