Loans can be used as a short term source of funds when applying for disability and they can also help fill the period of time between when a bill is due and the monthly benefit check arrives. As anyone that is going through the process know, it can take many months (if not years) for the Social Security Administration to approve an applications for SSI. Many applicants need an additional source funds over the short term to help them with their bills during this timeframe, and that is when a disability loan may be an option.
Anyone considering this approach of borrowing money needs to proceed with caution. The fact is that the majority of applications for disability are denied the first time, and there are no guarantees to receiving this form of assistance from the government. Also, due to the length of the approval process, if someone were to take a loan for paying some of their living expenses, they need to be confident that they can repay the money.
On the other hand, if someone is physically or mentally disabled and is already receiving disability payments from their state or the Social Security Administration, turning to a loan even then comes with risks. This should always be an option of last resort and the borrower should have a plan, and means in place, to pay it off in a very short period of time.
After an individual is already enrolled and receiving Supplemental Security Income (SSI), the monthly benefit may help them with paying their bills as it is a need based program. While the amount of money given to an individual with a disability is not extensive (most people receive less than $1500 per month) it is often enough for them to live on if they change their lifestyle accordingly. What most people really need help with is paying their bills when they are waiting on a decision from Disability Determination Services or their local SSA office. This is when a loan is often in high demand.
The other benefit, known as Social Security Disability Insurance (SSDI) is similar. This will also pay the household hundreds of dollars per month, which is usually enough for them to get by. But waiting for SSDI payments to start can be difficult, and once again, a disability loan can help during that period of time.
Some specialists may offer referrals to sources of loans. When applying for disability, an advocate can provide guidance during that timeframe. They offer a number of services, the most important being expediting the application process.
Another resource they can provide is referrals to various low interest loan programs that someone applying for disability may be able to benefit from. The advocates, many of whom are attorneys, know that this waiting period can be a very challenging timeframe, so they offer as much support as they can. Learn how disability advocates help with applications.
Many states also offer temporary disability benefits while the resident is waiting on a final determination from the government. These tend to be for residents of California, New York, Floridan Island, Hawaii, Texas or New Jersey, but other government agencies may have suggestions on loan programs as well. Find more public assistance.
Once the Social Security Administration has an approved an applicant, the average monthly payment made to a family is about $1100 per month. This amount is obviously not enough to live off of. It will barely pay for groceries, much less housing or medical bills for someone with a mental or physical disability. The first thing the person needs to do is to change their lifestyle if that is their only source of income. Another option that may be considered for short term needs is using a loan.
The funds can be used to cover the period between when the bills are due and when the monthly check arrives from the Social Security Administration. A disability loan should never be used for any other reason than that, unless the borrower has the ability to pay it off in a very short period of time.
An alternative to borrowing money or taken on more debt using a loan is to take advantage of other non-profit or charity programs. Or people can apply for additional public assistance programs. In addition, many disabled people do hold a job. In fact, the Supplemental Security Income offers the SSI Work Incentives program, which allows the family to increase their total household income and prevents them from relying just on an emergency loan. For more information on working, dial 1-800-772-1213.
State agencies such as the Disability Determination Services (DDS) or federal organizations including the Social Security Administration will not penalize anyone that borrows money when calculating their monthly cash benefits from SSI. As long as the borrower enters into a valid agreement when setting the terms of the loan, those funds will not count towards the household's income.
Since there is no reduction in SSI benefits when borrowing money, this opens up a number of opportunities for the individual. They can contact their local Department of Human Services to inquire into what loan programs they may have or a community action agency. Other lower risk options may be charities such as the Salvation Army or even local food banks. Click community action agencies.
All of these groups will try to provide referrals to the individual as they are going through the application process for disability. Some may provide some form of grant or loan to the resident to help them with expenses such as rent or medical needs during this timeframe. However the most common form of support will be assistance in applying for other benefits such as LIHEAP for utility bills or maybe cash grants from TANF / welfare.
A much riskier source of loans for the disabled is to turn to a lender in the private marketplace. This can include everyone from a credit union to a bank or peer to peer lending sites. Another source would be a payday lender, but this option is never recommended and should only even be considered as a last resort. Find a list of sources of loan products for paying living expenses.
The bottom line is that loans are available for really anyone, including the disabled. Whether the challenge is temporary or long term, mental illness, cognitive impairment or physical, borrowing money to supplement SSI or while waiting on an application is always an option. But using a disability loan does have risks, and should not be used as a long term solution.