Loans for people on disability: What they are, how to get one, and alternatives

As of 2024, more than a quarter of the population (28.7%, to be exact) is living with a disability, according to the Centers for Disease Control and Prevention (CDC). And of those adults ages 18 to 44 living with a disability, one in four doesn’t have a usual health care provider and has unmet health care needs because of costs.

While a disability can present financial challenges, there are solutions available, including loans that can help people with disabilities pay for their necessary health care and living expenses.

We’ll walk you through the types of disability loans available, the pros and cons of these loans, how to apply for a disability loan, and some alternatives to consider.

What is a disability loan?

A disability loan isn’t technically a type of loan. Instead, it usually refers to a personal loan that you can use to pay for expenses associated with your disability. Here are some costs you could pay for with a disability loan:

• Costs before you receive disability benefits: If you’ve applied for disability benefits but haven’t started receiving them yet, a personal loan could help bridge the gap to help you afford basic expenses like housing and food.
• Medical treatments not covered by insurance: A personal loan can help you pay for medical treatments and other expenses your health insurance doesn’t cover, from your deductible to alternative therapies to adaptive equipment.
• Other everyday expenses: In addition to health-related costs, a disability loan could help you pay for other everyday and one-off expenses. For example, you could fund home renovations to make your home more accessible to you.

While personal loan amounts vary from lender to lender, they typically range from $1,000 to $50,000, with a few lenders offering loans as high as $100,000.

Types of disability loans

Personal loans can be either secured or unsecured. A secured loan allows you to access funds by offering up some sort of collateral, such as a savings account or your vehicle. Meanwhile, an unsecured loan doesn’t require collateral — approval is based on your creditworthiness instead.

The table below breaks down some of the key differences between secured and unsecured personal loans:

If you’re a disabled veteran, you may also be eligible for a VA home loan. While this type of loan won’t help you with your health care costs or everyday expenses, it can help you purchase a home that meets your accessibility needs. And because VA loans don’t require a down payment, you can use that money toward other expenses instead.

When you’re shopping for a loan, be wary of payday loans, which charge high fees and are often predatory. These loans seem appealing because they’re easy to qualify for, but they usually do more financial harm than good.

Some payday loans go by different names to deceive borrowers. For example, some payday loans are marketed as “disability loans” to entice borrowers with disabilities into applying.

How disability loans work

A personal loan, which can serve as a disability loan, is an installment term loan. In other words, you borrow a fixed amount and pay it back in monthly installments over a set term.

Personal loans typically have fixed interest rates, which means you’ll have stable monthly payments. This makes it easy to plan for them in your budget.

Typical repayment terms range from just 1 or 2 years to about 7 years. It’s not a permanent solution, but it can help you get through financially until your benefits are approved.

Who can get a disability loan?

Unlike with Social Security Disability Insurance (SSDI) and other similar benefits, you don’t have to meet certain disability requirements to qualify for a loan. Instead, loan eligibility requirements are up to each individual lender.

When you apply for a personal loan, you’ll have to go through a credit check, which is a hard pull on your credit report. Most lenders require a credit score in the 600s or higher for approval, but some have more lenient credit requirements.

To qualify for a loan, you’ll also need a source of income to prove you can repay your loan. The good news is that SSDI and other government benefits count as income for the purpose of loan eligibility.

Loans for people on disability with bad credit

Bad credit doesn’t necessarily have to be a roadblock to getting a personal loan. If you’re on disability and have bad credit, you may have several options:

• Bad credit loan: Some lenders offer personal loans to borrowers with bad credit. You may end up with a higher interest rate, but could refinance later at a better rate if your credit improves.
• Loan with a co-signer: You may qualify for a personal loan with bad credit if you apply with a co-signer who has good credit. A co-signer agrees to take responsibility for the loan if you can’t make your payments. With the right co-signer, you could have your loan approved and land a better interest rate.
• Secured loan: A secured loan is an option if you have significant savings, a vehicle, or another asset you can use as collateral. The credit requirements on secured loans are often lower, making it easier to qualify.

Pros and cons of disability loans

A disability loan can be a great option if you need help covering extra medical expenses or bridging the gap until your disability benefits kick in, but it’s also important to understand the downsides. Explore the pros and cons of disability loans to better understand if it’s the right financial option for you.

How to get a disability loan

The process of applying for a disability loan is the same as applying for any other loan. Here’s a step-by-step guide:

• Determine how much you need: Consider what you need the money for, what other assets you have, and how long you expect to wait for your disability benefits to start.
• Get prequalified: Shopping around and getting prequalified with multiple lenders, which often doesn’t impact your credit score, can help you find the best terms.
• Choose the best lender: Ideally, you’ll find a lender with the lowest interest rate, but make sure you also consider loan fees, repayment terms, and other factors.
• Submit your loan application: Once you choose the best loan for your application, you can apply on the lender’s website, usually in just a few minutes.
• Wait for approval: It could take up to several days to get your loan approval, but if you have good credit, you may find out right away if you get the loan.
• Receive your loan funds: Your lender will deposit the funds into your bank account, and you’ll have to start making payments on the loan.

While these steps provide a general framework for getting a disability loan, know that the process could be a bit different from lender to lender. Make sure to follow your lender’s instructions for the best chance at loan approval.

Disability loan alternatives

If you don’t qualify for a disability loan or you decide it’s not the right option for you, here are some alternatives to explore to get the cash you need.

Expedited Supplemental Security Income payment

The Social Security Administration (SSA) can begin your benefits payments more quickly than usual in four different situations:

• Presumptive disability (PD) or presumptive blindness (PB) payment
• Emergency advance payment
• Immediate payment
• Expedited reinstatement cases

The SSA provides detailed information on its website about when you may qualify for these expedited payments.

Government assistance

If you have a disability and limited income or assets, you may qualify for other government assistance to help you pay for food, housing, utilities, medical care, and other expenses.

The federal government has an online benefits finder that shows you the types of federal benefits you may be eligible for based on your answers to a few questions. You can also contact your state or local government to find out what benefits exist that could provide some financial assistance.

Cash advance

If you have a credit card, you may be able to borrow money from your card issuer in the form of a cash advance. Depending on your lender, you may be able to get a cash advance by requesting one online, visiting your local bank branch, or even taking cash from an ATM using your credit card.

Some cash advances may be available with 0% APR during a promotional period. Just know that if your balance isn’t paid in full, interest will start to accrue, which will increase your monthly payment and could create an additional financial burden.

A cash advance may be worth considering if no other options are available. You don’t have to be approved for a cash advance if you already have the credit card, meaning it could be a good option if you don’t have the best credit score.

FAQ

If you’re considering applying for a disability loan, learn more by reading the answers to these frequently asked questions.

Can I get a loan while on disability?

Yes, you can get a loan while on disability. Loans aren’t considered an income source. For this reason, getting a loan won’t affect your eligibility for disability benefits. However, it can affect how much you receive per month. Funds you don’t spend in the month you borrow them count toward the next month’s SSI resource limit.

Where can I get a loan on disability?

You can get a loan on disability anywhere that offers personal loans as long as you meet the lender’s loan qualifications. You can get a loan from a traditional bank, credit union, or an online lender.

If you have limited mobility, you can apply for a loan from the comfort of your home by using an online lender. Some brick-and-mortar lenders also offer the option to apply for a personal loan online or in person.

Who gives loans for people on disability?

Many different lenders give loans for people on disability, including traditional banks and credit unions, as well as online-only lenders. Disability benefits count as income for the purposes of qualifying for a personal loan, so the fact that you have a disability doesn’t have to be an additional roadblock to qualifying for a loan.

Is a disability loan the same as a hardship loan?

A disability loan and a hardship loan are essentially the same thing. Though they may be used in different situations — one helps disabled individuals to pay for expenses related to their disability, while the other provides a safety net to people facing financial hardship — they are both personal loans and have the same application process and features.

The bottom line: Disability loans bridge financial gaps

A disability loan can provide a safety net when you’re facing expenses associated with your disability. These personal loans can bridge the financial gap while you wait for your disability benefits to start and can pay for expenses that your health insurance or other benefits may not cover.

You have plenty of options when you’re shopping around for a personal loan, including both secured and unsecured loans, and loans from both traditional and online lenders. And if a personal loan isn’t right for you, there are alternatives available, including expedited SSI payments, other government benefits, and cash advances.

If you’re considering a personal loan to help manage your finances with a disability, apply online today with Rocket Loans^SM.