This guest post is on a subject that should be approached very carefully. Borrowing money using your Social Security benefits as collateral is risky, and should not be undertaken without advice from a financial planner.
The post is fromMarie Nelson, a well-known blogger. She has hands-on experience on writing about finance, legal, and insurance matters for the last five years.
Due to the price hikes and credit crunch we all go through some sort of financial crisis in our lives at some point of time. Since it becomes a bit difficult to get approval for bank loans or credits from other financial sources, most people tend to depend on cash advance, payday loans, and other forms of short-term finance. While these finances provide you with instant cash, they come with really high rates of interest. In a situation like this, social security benefits turn out to be a real lifesaver. You can even use it as a collateral and apply for credit.
Social security benefits that are paid to workers or their families on a monthly basis from the government, turns out to be a reliable source of income. In fact, there are people who rely more on these benefits than the money they earn from their job. This is so because government payments can’t be garnished and they are supposed to be guaranteed. The amount that you get from the government helps you get approved for a real estate loan or a car loan as it puts the debt-to-income ratio in the borrower’s favor. In fact, getting social security benefits makes you eligible for getting a short-term loan as well.
Well, here are some tips on how you can borrow cash by using your social security benefits:
- Make sure you bring your social security letter of benefit or the award to the lender whom you are going to approach for the credit. Also, keep the proof of your valid bank account and your photo ID that has been issued by the state. If you are looking for a short-term loan, use the monthly benefit payment as it will make the process even smoother and quicker.
- Just like choosing any other deals, ask for referrals from friends, family and acquaintances. Make sure you deal with a legitimate lender so that your SSB is not misused. Check out if the lender is licensed to provide such loans in that particular locality. If possible, ask for a recommendation list and contact two or three of his past customers to know their feedback.
- Read the application form carefully and fill it up with the relevant information. List the government benefit payments as income. Read the terms and conditions thoroughly before you sign the deal. If any of the terms mentioned in the document seems to be ambiguous to you, ask for proper explanations. Sign the contract only after you are absolutely clear with all the terms and facts. If youneed a loan todayand are opting for a short-term credit, you will receive the borrowed amount immediately. If you are trying to get a bigger loan, it may take some time to get the application approved.
- The moment you receive your social security check, make the payment for the short-term loan. If you wish, you can pay off the entire amount along with the interest once the security benefit is paid.
