Borrowing money is incredibly common in today’s economy. Within the past year, nearly 50% of Americans took out a personal loan. Many of them used the money to consolidate debt, fund a renovation, cover medical expenses or take a vacation.
As a single mom, your reasons for borrowing may differ. Maybe you’re trying to apply for a mortgage or pay off an expensive hospital bill. Maybe you need to purchase a car or replace your furnace. If you don’t have the cold, hard cash to cover these expenses, you’ll have to take out a loan. At this point, you may wonder if you’re even eligible to borrow money.
With no proof of income, you may have difficulty finding a willing lender. However, there are still a few options for housewives like yourself.
Borrowing Options that Might Work
If your partner or husband supports you financially, you might consider applying for a loan together. Since he can show proof of income, you may be eligible for bigger loans with lower interest rates. If you don’t want to involve your partner for some reason, you may begin researching a few possible options below.
Ask About Collateral
Take inventory of your personal assets. Do you own a car, home or some other valuable item? Find a lender who will accept it as collateral. As long as you make regular payments and repay your loan in full, they’ll let you keep your property.
If you don’t, they can claim whatever’s securing your loan. Therefore, it may be best to pledge gold jewelry or other valuables you don’t necessarily need, just in case you’re unable to repay the lender.
Find a Co-Applicant
If you don’t want to use your belongings as collateral, try to find a co-applicant to ensure the lender that they won’t lose their money.
Look for a trusted friend or family member who is financially capable of repaying a loan. Then, have an honest conversation about your situation. If they’re willing to help you out, sit down with your lender to talk details and sign the dotted line.
Get a Peer-to-Peer Loan
Peer-to-peer lending may also offer viable loan options for single moms. Instead of borrowing from a financial institution, you’ll borrow from an individual or group of people who are willing to loan you money.
You can find these lenders on P2P websites like LendingClub, Upstart, Prosper and Peerform. Each investor will have different eligibility requirements and offer various APRs and loan limits, so be sure to do your research before choosing one.
Find a Flexible Lender
If all else fails, try to find a flexible lender who offers loans based on total household income. This way, you can borrow money based on your husband’s income without worrying about finding a job.
Some lenders might also review your budget or borrowing history to ensure the loan is affordable for you. If you’ve applied for and faithfully paid off loans through a specific bank before, consider returning as a repeat customer to boost your chances of getting approved for another.
Other Possible Alternatives
Loan institutions are businesses and they can’t afford to lose any money. If they deem you an unreliable borrower, they won’t agree to give you a loan. In this case, you may have to look for other alternatives that will lend you money in case of emergencies.
Apply for a Credit Card
Finance new purchases, consolidate old debt or prepare for emergencies by applying for a credit card. Look for one that promises 0% interest for at least 12 months and read the fine print. Some cards will charge transfer fees or exorbitant interest rates after the introductory phase.
Do your research and find one that will support you and your financial goals. You may still have to declare your household income, but at least you’ll have more time to repay loans.
Find a Job
Of course, some single moms simply won’t be able to find a willing lender because of their lack of income. If you find yourself in a similar situation, consider getting a job. You could even find a remote job and keep your title of stay-at-home mom.
Look for part-time positions with flexible hours so you can make some money without sacrificing your parental obligations. After six to 12 months on the job, you may qualify for loans you wouldn’t have otherwise.
Save, Save, Save
If you directly deposit every paycheck into savings or simply adjust your budget to save more money, you might not even have to worry about taking out a loan. Rethink your standard of living and begin building an emergency fund to cover unexpected expenses. When disaster strikes, you’ll be happy to have stashed away some cash.