There is no such thing as a personal or government loan program specifically earmarked for single parents. Do not be fooled by misleading articles and headlines suggesting otherwise.

Therefore, those with a bad credit history face a challenging set of circumstances when purchasing a car, renting an apartment, buying a home, starting a business, returning to college, or just repaying student loans.

Mothers and fathers living alone do have access to government benefit programs targeting low-income families. You will have to learn what they are all about, and how to go about applying for each benefit. Then relate these lessons to the loan program that matches your current need.

Unsecured Loans for Single Mothers or Fathers

Unsecured personal loans for single mothers or fathers offer the opportunity to obtain cash quickly without pledging collateral. The most common forms of collateral are cars or houses followed by jewelry. You do not put these assets at risk with an unsecured account.

Request an unsecured personal loan here. Single mothers or fathers with a steady income established job history and decent credit scores have the best qualifications. Single parents with poor credit history, seriously in debt, or with no job or income should tread carefully.

Seriously In Debt

Single mothers and fathers seriously in debt may find it very difficult to borrow their way to prosperity by opening a new personal loan. Consolidation is rarely the answer. Most people wind up increasing the amount of interest paid over time.

Do you qualify for debt relief? A settlement program could be a better option for anyone who owes more than $10,000 in unsecured debt (credit cards, personal loans, payday loans, etc.). The company will help you negotiate some relief with creditors.

Poor Credit History

Many single parents have poor a poor credit history making it difficult to qualify for a new personal loan. Moms and dads living separately have double the housing costs. At the same time, it is more difficult to hold down a full-time job without a second person in the home.

Bad credit personal loans with cosigners can help a single mother gain approval. Parents or siblings with better qualifications can promise to make payments if you start falling behind. Lenders find that two income streams are more reliable than one.

No Job or Income

Single moms and dads who have no job or earnings will find it very difficult to qualify for many personal loan programs unless he or she can show a steady stream of income from other sources. Most private lenders will want to see a stable job history or a reliable source of funding sufficient to make monthly payments.

Request a personal loan based on income from benefits. Make certain that you have the paperwork on hand to verify any of these alternative forms of cash assistance if you have no job or income.

  • Alimony
  • Child Support
  • Unemployment Benefits
  • Disability Benefits
  • Temporary Assistance for Needy Families

Single Parent Car Loan Options

Income is a second limiting factor for single parents with bad credit hoping to gain approval for a car loan. Automotive finance companies will compute a debt-to-income ratio as part of the qualification process. With only one income, it is more difficult to show a low ratio and afford reliable transportation.

Choose a lower-priced vehicle to keep the initial principal amount small and the insurance rates as low as possible. Here are resources that may help.

Affordable & Reliable

Do not expect any assistance when buying an automobile just because you are a single mother or father. You must present your borrowing credentials, like any other applicant. There are no special favors.

Auto loan eligibility requirements include your credit score, income level and job history, and the size of your down payment. Choose a reliable automobile at a sticker price you can afford. Give yourself a cushion in case an emergency arises. You do not want to fall behind on payments and lose your only source of transportation to repossession.

Auto Insurance

Single moms and dads should also factor in auto insurance rates and features when choosing the vehicle they want to buy. Since insurance companies often use credit scores to compute rates, keeping the price of the vehicle low becomes doubly important.

If you are financing the vehicle, the lender will want you to carry full collision coverage in order to protect their investment. The lower the price of the vehicle you choose, the lower your auto insurance rates will be – holding aside your driving record and other underwriting factors.

On the other hand, now is a good time to include other coverage options to protect your delicate finances in the case of a breakdown or other emergency. You pay more in premiums, but avoid future unexpected expenses that cause you to hurt your payment history further.

Paying a little extra for these features can help you overcome surprise expenses.

  • Personal injury protection – covers your medical expenses after an accident.
  • Extended repair warranty – pays for repairs due to mechanical failure.
  • Roadside service and towing – help you in the case of vehicle breakdown.
  • Rental car reimbursement – provides transportation while your car is in the repair shop.

Single Parent Business Loans & Grants

For single parents with bad credit, starting a new small business is an appealing but challenging option. Owning your own start-up enterprise can allow you to work from home, or in a location of your choosing. This makes it easier to balance your work and personal life.

On the other hand, funding the enterprise will be a significant challenge. With poor payment history combined with only one source of income, your borrowing credentials are not ideal. Therefore, exhaust grant opportunities before attempting to take on further debt.

Here are several resources that may help.

Government Grants

Single moms thinking about how to fund a new business venture should begin by researching government grant opportunities. The federal government shows preference to women and minority-owned small business opportunities.

A grant differs from a loan and is much better. You do not have to repay the grant money. It is yours to keep. Therefore, it pays to invest both time and money into identifying and applying for grants as your first step.

Small Business Loans

Small business loans for single mothers or fathers will require a detailed business plan and perhaps a history of consistent revenue and earnings growth. Many commercial banks will be reluctant to approve a loan or line of credit for a startup.

Begin with your local Small Business Administration office. They can help you develop a business plan, connect you with a volunteer mentor, and refer you to local lenders who may agree to fund your new enterprise.

The SBA collaborates with SCORE, a group of volunteer mentors. Take full advantage. You may have to parent by yourself. However, you do not have to navigate starting a business all alone. Work with an expert instead.

Single Parent Housing Loans from Government

Single parents with bad credit need a decent safe home to live and raise her children in. The big question every family faces is whether it is better to rent or own the place where you live. Government programs make each option more palatable.

There are pros and cons to both renting and owning. Apply the reality of your personal financial situation to determine which option works best. Some of these resources may also help.

Renting an Apartment

Single fathers and mothers often find that renting an apartment is the most affordable alternative. Government benefit programs target low-income families for financial help paying for rental housing. Living as a tenant is often best. You may qualify for three different programs.

  • Privately owned subsidized housing
  • Public housing
  • Housing Choice Voucher Program (Section 8)

Taking out a loan to pay for rent is a desperate move best avoided – unless you need the money for a security deposit. The property owner will spread the rent payments out over time anyway – without interest charges. Why pay interest when you do not have to?

Buying a Home

Single moms and dads with a negative credit history will find buying a house difficult, but not impossible. Home-ownership is more expensive than you might think. Project your expenses carefully before falling in love with a house, and spending money on a mortgage application.

The government approved mortgage lender will consider three main criteria.

  1. The size of the down payment affects the loan-to-value ratio. You will need to save a significant sum to improve this part of the qualifying criteria. FHA loans offer lower down payments, which are ideal for first-time buyers.
  2. Two debt-to-income (DTI) ratios will be very important. Divide your projected monthly debt service payments by your monthly income to compute this underwriting factor.
    1. Front-end DTI includes mortgage payment, real estate taxes, plus homeowners insurance
    2. Back-end DTI includes all of the above, plus other debt service payments (personal loans, car notes, credit card minimum payments, etc.).
  3. The minimum credit score needed to meet requirements varies by the government agency insuring the mortgage.

Single Parent Student Loan Programs

Once again, there are no student loan programs specifically set aside for single parents. You will have to sort through the financial assistance options available for low-income families and other hardship grants for college funding.

Here are links to the resources that can help if you are planning to return to school, need to modify your repayment schedule, or you are seeking forgiveness on your obligations.

Returning to College

Single mothers and fathers returning to school should jump on any education grants, and think carefully before taking out an education loan. Grants are ideal as they reduce your costs, and do not require repayment. The same is not true for loans.

The federal student financial aid formula favors applicants with lower incomes and fewer resources. People raising children by themselves often struggle with finances, which actually improves your education grant qualifications.

Approach education loans very carefully. Make certain that you pursue a degree that vastly improves your job prospects. You will have to repay the loan with interest after graduation. Failure to land a better paying job could ruin your finances for a very long time.

Repayment Programs

Deferment and forbearance programs can help single moms and dads with student loan repayment problems. It is easy to fall behind on payments with only one income combined with the expenses of raising a child.

  • Deferment suspends payments indefinitely
  • Forbearance suspends payments for 12 months

Research the different qualifying criteria for deferment and forbearance.

Debt Forgiveness

Single mothers and fathers may qualify for student loan debt forgiveness, which cancels or discharges a portion of the amount that you owe. The criteria have nothing to do with your marital status – unless you are a widow or widower.

  • School closed while enrolled or shortly after
  • Totally and permanently disabled
  • Deceased – you are not responsible for spouse’s debt
  • Discharge in bankruptcy – very difficult
  • Loan documents were falsely certified
  • Unpaid refund from college
  • Teacher in a low-income school
  • Employed in certain public service
  • Defrauded or mislead by school