Many people find themselves in a difficult financial situation and need to borrow money. Whether it is for medical bills, home repairs, or just some extra cash to get through the month, they are faced with the question of what type of loan to take out. There are many options available that can help you with your needs. For example, COVID-19 loans offer payment relief options for borrowers who cannot make their monthly payments on time due to extenuating circumstances such as unemployment or illness.
What are the different types of loans available to help during the COVID-19 pandemic?
A few different types of loans may be available to help you through this difficult time. These include:
A personal loan is an unsecured loan, meaning it doesn’t require collateral. This type of loan is typically used for smaller amounts and has a shorter repayment term than other options.
A car loan can help you finance the purchase of a new or used car. In addition, the interest rates on these loans are usually lower than those on credit cards.
Home Equity Loans
A home equity loan allows you to borrow money against the equity in your home. This type of loan typically has a lower interest rate than other options and may be available even if you’re currently unemployed.
Student loans may be available to students who cannot continue their education during the pandemic. In addition, the government has announced plans to waive interest on all student loans for the rest of 2020.
What are some of the payment relief options that are available?
There are a few different payment relief options that may be available to you, including:
A deferment allows you to stop making payments on your loan for a certain period. This option can be helpful if you’re struggling to make ends meet due to COVID-19.
A forbearance allows you to stop making payments or reduce your monthly income temporarily. This option can be helpful if you’re struggling to make ends meet due to COVID-19.
The government has announced plans to reduce the monthly payments on all federal student loans for the rest of 2020. You may also be able to lower your expenses by consolidating your loans or switching to an income-based repayment plan.
What should I do if I’m having trouble making my loan payments?
If you’re having trouble making your loan payments, contact your lender as soon as possible. They may be able to help you find a payment relief option that works for you. You can also visit StudentAid.gov/payments for more information about your options.
The Department of Education has announced plans to waive interest on all federal student loans for the rest of 2020. This means that borrowers will not have to pay any interest on their loans during this period.
You may also be able to reduce your monthly payments by consolidating your loans or switching to an income-based repayment plan. Contact your lender if you need assistance with either of these options.
How can you get payment relief for your mortgage, student loans, and other bills?
When you need to make a payment for your loans, we can help. Our team is dedicated to helping borrowers get the relief they need and deserve. We provide free debt management services that will allow you to take control of your financial situation today!
FHFA encourages anyone facing economic hardship due to COVID-19 to immediately contact their landlord or mortgage servicer (the company they send their mortgage payments to) to see if they qualify for payment relief.
Suppose you’re a landlord struggling to pay your mortgage because your tenants have been impacted by COVID-19 and have difficulty paying their rent. In that case, the Consumer Financial Protection Bureau (CFPB) has helpful information on state and local programs offering rental assistance.
What are some of the deferment or forbearance options available?
This may occur if you have trouble making payments due to illness, unemployment, underemployment, pregnancy, or other types of personal issues.
At the end of the forbearance plan, you must repay missed amounts, but you are not required to repay it all at once. Instead, about a month before your forbearance plan is scheduled to end, your mortgage servicer (that’s the company you send your monthly mortgage payment to) will contact you to discuss your situation.
For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account, and you do not need to submit other documentation to qualify. You can tell your servicer that you have a pandemic-related financial hardship.
This option allows student loan holders to postpone their federal student loan repayments because they’re in school at least half time; employed at specific public service jobs (teacher); unemployed; on active duty military service; having difficulty making payments due to economic hardship, or serving as Peace Corps volunteers.
Are there any special loan programs available for small businesses?
A few different loan options may be available to small businesses impacted by COVID-19. The U.S. Small Business Administration (SBA) has announced that they will be offering Economic Injury Disaster Loans (EIDLs) to qualifying businesses. These loans provide up to $200,000 in assistance and can be used for working capital, debt refinancing, or other needs related to the impact of COVID-19.
The SBA is also increasing the availability of their Microloan program, which offers loans up to $50,000. This program is designed specifically for small businesses with fewer than 100 employees.
Small business owners should also explore all possible funding sources through their local banks. The local community may have a lot to offer, and businesses need to open up those lines of communication as soon as possible.
How can you get help if you’re struggling to make ends meet?
There are several loan forgiveness programs for borrowers who work in public service or education fields, such as AmeriCorps volunteers, teachers, nurses, and doctors. For example, public Service Loan Forgiveness (PSLF) provides complete repayment of the remaining balance on certain federal student loans after 120 payments while working full-time with an eligible employer.
Figure out who services your mortgage, and see if your mortgage is backed by Fannie Mae, Freddie Mac, or the federal government. Your mortgage servicer’s telephone number and mailing address should be listed on your monthly mortgage statement.
If you or your landlord receive federal financial assistance for housing, you are also protected from housing discrimination based on age. Learn about your fair housing rights when you are facing eviction.
Teacher Education Assistance for College and Higher Education (TEACH) Grant Program
This includes a provision that forgives up to $17,500 — depending on what occupation is chosen — if teaching requirements are met at an elementary or secondary school serving low- students. In addition, Federal Perkins Loans may be eligible for cancellation if the borrower works in a public or nonprofit child care, early education, or health services field.
Public Service Loan Forgiveness (PSLF)
This program forgives up to 100% of the remaining federal student loan balances after 120 qualifying monthly payments while working full-time with an eligible employer and not having any loans under active repayment during that period.
The minimum required payments must be made each month on time through Standard Repayment Plan, Income-Based Repayment Plan (IBR), or Pay As You Earn plan (PAYE). If you make less than the required payment amount but at least one dollar every month, it will count as a qualified payment toward your total number of costs needed to qualify for PSLF.
Income-Based Repayment (IBR) Plan
This plan caps your loan payments at 15% of your discretionary income. After 20 years of qualifying monthly payments, any remaining balance on loan will be forgiven. The PAYE plan is similar to IBR but offers a smaller payment cap of ten percent and forgiveness after only 20 years.
Public Service Loan Forgiveness (PSLF) and Income-Based Repayment Plans are considered forms of student loan forgiveness.
What should you do if you’ve lost your job because of COVID-19?
Alternative Loans, Teacher Loan Forgiveness, and Public Service Loan Forgiveness. These programs will forgive the remaining balance of your loan if you qualify for them. You’ll put yourself in a better financial position by enrolling in these plans than defaulting on your loans!
There are also Income-Driven Repayment Plans such as PAYE or REPAYE that can help with payments during unemployment. If you cannot afford to make any payment, there may be an option where income isn’t required (Income Sensitive Repayment Plan).
The best way to find out what is available to you is through consolidation and working with someone who has experience dealing with COVID-19 borrowers like us!
How do you know if you’re eligible for a loan discharge or cancellation?
Loan discharge and cancellation are available to borrowers who meet specific requirements. To be eligible for a loan discharge or cancellation, you must:
- Be unable to continue making payments due to COVID-19.
- Have been impacted by COVID-19 in some way that prevents you from working, going to school, or earning an income.
- Be current on your student loans at the time of application.
- Meet other specific criteria depending on the type of loan discharge or cancellation you’re seeking.
Can you refinance your home or student loans during this time of crisis?
With the nation in a period of great economic and social upheaval, many people seek ways to make ends meet. Can you refinance your home or student loans during this time of crisis?
Are you considering refinancing your home or student loans? Are you looking to consolidate your debt? If so, now is a great time. There are many benefits to taking advantage of the best refinance rates available now.
Refinancing can be an excellent way for borrowers with higher interest rates on their current loans to save money on their monthly payments. Additionally, refinancing can help borrowers consolidate multiple loans into one loan with a lower interest rate, making it easier to manage your debt.
If you are considering refinancing your home or student loans, be sure to do your research and compare offers from several lenders. It’s essential to make sure you are getting the best deal possible.
If you are struggling to make your monthly payments, please don’t hesitate to reach out for help. There are many options available for borrowers struggling with their student loan payments. Please visit our website or call us today for more information.
There are many loan options available for borrowers struggling with their loans and missed payments. Please visit our website or call us today for more information on the best way to get back on track. We are here to help!