Can I Get a Payday Loan When I’m on Disability?

If you’re receiving disability benefits from the federal government, you may wonder if you can get a loan. For example, if you’re not getting a regular paycheck, can you get a payday loan while on disability? Discover how you might be able to borrow money while on disability below.

How can I borrow money while on disability?

In many cases, the qualification requirements for getting a personal loan while on disability are similar to the requirements for everyone else. Lenders aren’t typically concerned with whether you’re on disability or not and are more interested in whether you can reasonably repay a loan.

To that end, lenders look at some of the following factors when considering you for a loan:

• Your credit. Lenders may check your credit score or look at your credit report. They want to see that you have a history of paying your debts on time and as agreed. If you do, that may make you a less risky borrower in their eyes regardless of where your income comes from.
• How much debt you have. Many lenders want to see how much financial obligation you already have each month. If you’re already shelling out $2,000 in payments on debts and bills and your income is $2,200, you aren’t likely to qualify for a loan. Lenders would know that you likely can’t afford to pay them back.
• Your total income. For the same reasons, lenders may ask about your income. They want to see that you have a consistent income that allows you to meet any payment agreement you sign to get a loan.

Is disability considered income for a loan?

Yes, in most cases, disability payments are considered income for the purposes of qualifying for a loan. In fact, Fannie Mae and Freddie Mac — agencies that set guidelines and rules for how conventional mortgages are handled — have specifically spelled out in their guidelines that disability income can be used to help someone qualify for a mortgage.

I’m on Social Security or disability. Can I still get a payday loan or cash advance?

Some payday loan lenders will provide a cash advance loan or payday loan based on SSDI benefit payments rather than a traditional paycheck. With this route, you secure the loan based on how much your SSDI benefits payment is. The payday lender sets up an auto-debit from your checking account for the payment, typically the day or day after you get the SSDI deposit.

Can you get a payday loan with a Direct Express Card?

Not everyone gets their federal benefits payments in a checking account. If you get your disability or SSDI payments via a Direct Express Card, you may be able to find a payday loan lender that will work with you to accept payments via that card.

Is a Payday Loan Your Best Option?

Many people turn to payday loans at a time of financial need because these lenders typically don’t check credit. But you can find other loan options that don’t require a credit check or great credit that may be easier to pay back than a payday loan.

For example, our installment loans may make it easier for you to access more money than you could with a payday loan. And since you pay back loans in installments instead of one lump sum on the day you get your next SSDI disbursement, it can be a lot easier to fit the payments into your budget.

How do you build credit while on disability?

You build credit when you’re on disability the same way you work to improve credit any other time. Some things you can do to build credit while on disability include:

• Paying your bills on time. A positive payment history is a huge boon to your credit score. Make all your debt payments on time, and when possible, work with lenders that report payments to the credit bureaus. We report payments to two of the three major credit bureaus, making it easy to build credit with one of our loans.
• Paying down debt when you can. Reducing the amount of debt you have can positively impact your credit score. It also helps you qualify for loans in the future if you need them, as lenders won’t be as worried that you’re already maxed out on debt obligations.
• Not maxing out credit cards. High credit utilization can lower your credit score. Utilization rate refers to the ratio of your current balances to your credit limits. For example, if you have a credit limit of $1,000 and a balance of $500, your credit utilization rate is 50%. That’s considered high; you want to try to keep your utilization rate lower than 30% generally.

Frequently Asked Questions

What is Direct Express emergency cash?

Direct Express emergency cash is a way someone can get access to up to $1,000 of their government benefits funds without their Direct Express card. For example, if you lose your card and have to order a new one, it can take up to two weeks on average. In the meantime, you wouldn’t have access to the money you receive from disability or SSDI. Direct Express emergency cash lets you get the funds deposited into an account where you can access it.

Can I get a cash advance if I’m on disability?

Yes, you may be able to get a cash advance from a lender if you’re on disability. You would have to agree to have the advance paid back out of your future disability payments.

How can I get out of debt while on disability?

Getting out of debt on a limited income can be challenging, but it’s not impossible. Some tips to consider include:

• Taking out a consolidation loan to pay off other higher-interest debt to make your debt more manageable.
• Not incurring new debt, such as not running up credit card balances.
• Reducing expenses when possible so you have more money to put on debt.
• Paying more than the minimum balance required on debts, even if you can only pay $10 extra per month.