Can You Get a Payday Loan While on Social Security?

Social security card and money

The short answer to the question of “can you get a payday loan on Social Security?” is yes  – payday loans require proof of income, and Social Security funds are often considered to be a valid form of unearned or alternative income. Be prepared for potential lenders to ask for a copy of your Social Security award letter as confirmation, as well as a bank statement that shows a record of income. Before moving forward, know that while there are many lenders who are willing and able to work with individuals on Social Security, there are some who do not.

Are Payday Loans for Social Security Recipients a Good Idea?

In addition to asking yourself “Can I get a payday loan on SSI?” you should also ask “Should I get a payday loan on SSI?” There are numerous instances where this is and isn’t a favorable idea. We’ll explore them in-depth, below.

Why Get a Payday Loan on SSI?

  • Accessibility: Unfortunately, Social Security benefits do not provide much flexibility to recipients. If there comes a time when you have an unexpected expense but will not be receiving your benefits for another couple of weeks, a payday loan can provide the advance on your funds that you need.
  • The Amount You Can Borrow Can Vary: Most often, the amount you qualify for on a payday loan will directly correlate with your monthly salary. However, if you were to apply for another payday loan in the future, you may qualify for a higher amount. (Provided that you paid off the first loan already.)
  • Bad Credit-Friendly: Even if you have a bad credit score, you can still qualify for a payday loan. In fact, so long as you pay off the payday loan in full upon your next pay cycle, your credit score might even get a little boost.

Why NOT to Get a Payday Loan on SSI?

  • Difficulty with Repayment: Are you positive you’ll be able to pay off your payday loan when your next pay cycle comes up? If not, you’ll begin to incur debt and your credit can be negatively affected.
  • Expensive Penalties: As with any loan, you’re not just paying back the amount borrowed. You’ll also be paying interest, which means that even if you pay back the loan right away, you’ll still be paying back more than what you borrowed in the first place. And if you default, there are usually costly penalties involved.
  • Credit Damage: A payday loan can damage your credit just as easily as it can help it. If you’re unable to pay it off on time, you may see your score drop.
  • Concealed Fees: Lenders offering payday loans for Social Security recipients don’t always have your best interest in mind. If you’re not careful, you might agree to something with numerous hidden fees.

Learn More with Xpress Cash

We’ve answered the question of “Can you get a loan on Social Security?” and provided some reasons why you should or shouldn’t consider it, but if you’re still feeling unsure, don’t hesitate to reach out to our team. The friendly professionals at Xpress Cash are always here to help ensure you make smart financial decisions. Visit us in Michigan today to learn more about our short term loan options!