Helping Texas Residents Burdened by Debt

Need a Loan Due to Financial Difficulties?

Compare best loan options
Qualify for hardship consolidation
Put debt worries behind you

How to Apply for a Hardship Loan

Check your credit score

Credit scores are used by lenders to help determine whether or not to offer you a loan. The higher the credit score, the more likely you'll qualify for a personal loan or get a lower interest rate. Generally, most credit ratings are as follows1:

  • Exceptional - 850-800
  • Very Good - 799-740
  • Good - 739 - 670
  • Fair - 669 - 580
  • Very Poor - 579-300

Remember, when you apply for a loan, that triggers an inquiry into your credit score, which drops your credit score down a little. When applying for a loan, be judicious, consider if the loan is one you really could qualify for. Most loans have a minimum qualifying credit score. Look into this to help determine your eligibility. You can always check your own credit score using free credit checks.

What to do if you have a poor credit score?

If you have a poor credit score, it generally will be harder to get a loan. However, there are certain actions you can take to help you qualify.

First, work on cleaning up your credit score. This will take time and action on your part, however, getting your credit score up on your own will help in the long run. Make sure you're meeting the monthly payments on your current debts. Set up auto pay if that helps. To start, look for things like the following. If you find any information that's incorrect, work on correcting it so it stops negatively impacting your credit.

  • Wrong addresses or names
  • Closed accounts reported as open
  • Incorrect credit limits

Second, consider a co-signer. If you have a fair credit, adding a co-signer to the loan could increase the chances of approval. What's a co-signer? A co-signer is someone who agrees to pay your debt should you default on the loan. If you do this, make sure your co-signer has a high credit score and can afford to pay the risk.

Third, if you have a personal relationship with your bank or credit union, consider asking them for a loan. They may be more willing to overlook spots in your credit history if you've been banking with them for a while.

Fourth, pay down what debts you can. Lenders look at debt-to-income (DTI) ratio as a way to determine if you'd qualify for a loan. The DTI is the percentage of your monthly debt payments divided by your monthly income. A lower DTI shows lenders your debt is under control. If you have the option, pay off any debts you're able. Consider using the debt snowball method as a way to pay off your debts faster. Remember, lenders also look at your monthly income and employment history to help determine if you're a safe bet to give a loan to. Check the income and employment requirements of the loan you're applying to.

Set a reasonable loan amount

When requesting a loan, make it reasonable. As much as you may want to, don't ask for above a reasonable amount. Consider why you need a loan and what is a realistic dollar amount to reach your needs. The larger a loan ask, the riskier it becomes for the lender.

What types of loans can you get?

Unsecured vs. Secured debts2


Unsecured debts are not tied to any collateral. Should you fall behind on the debt, the creditor cannot claim your assets as a form or repayment. However, there are other actions which they can take such as hiring a debt collector, garnishing your wages, or put a lien on your assets until you've paid the debt. Credit card debt, student loans, payday loans, and medical bills are all examples of unsecured debt.

Most unsecured debts are released if you file for bankruptcy with some exceptions (student loans, support payments, and/or court fines and penalties)


A secured debt is a debt which has been secured by some form of collateral. Home mortgages and car loans are the most common types of secured debt. Should you fall behind on payments, a creditor can seize (foreclose or repossess) the asset you made against the loan. You never fully own the asset until the loan is paid off in full.

Secured debts are not included in bankruptcy, however a creditor can still take the asset as repayment.

Necessary Documents

When applying for a loan, you will be asked for verification of identity, address, and income. The following are examples of valid proof.

Proof of IdentityProof of AddressIncome Verification
  • Driver's license
  • Social Security Card
  • Passport
  • State ID
  • Military ID
  • Certificate of Citizenship
  • Government Issued photo ID
  • Utility bill (power, cable, water, etc)
  • Lease agreement
  • Voter registration
  • Change of address confirmation from US Postal Service
  • Insurance
  • W2
  • Pay Stubs
  • Bank Statements
  • Copies of income tax return
  • Verification from your employer
  • 1099 tax forms


Pre-qualifying for a loan gets you an idea of what types of loans you may qualify for. Lenders will most likely do a soft credit check during this process, which does not hurt your credit score. Once you have your pre-qualified offers, compare loan amounts and shop around. This will give you insight into what types of loans are available to you, the interest rates, loan amounts, and terms. Don't forget to check your local banks and credit unions to see what types of loans they offer.

Before deciding on a loan, always remember to read the fine print. Watch out for the following information3:

  • Prepayment penalties
  • Automatic withdrawals
  • APR surprises
  • Payments are reported to credit bureaus
  • Flexible payment features
  • Direct Payment to Creditors

Consider Other Alternatives to Loans

Consider why you want a loan. If a loan is necessary, then proceed. But are you looking for a loan to help pay down your debts? If you are, determine if there are other ways in which you can accomplish this goal. There are many debt help services out there and a lot of do-it-yourself debt help guides.

1 This is according to FICO credit score system:


3 How To Get an Unsecured Personal Loan: Read the Fine Print