Times have been hard for many Americans. Most families at the current moment are barely getting by financially, with a majority of American workers living paycheck to paycheck.
A loan can help during this difficult time, but many potential borrowers are scared away by the potential negative impact of these loans. That’s where a forgivable loan can come in.
What is a forgivable loan? Loan forgiveness can sound almost too good to be true to a desperate borrower, but this kind of loan is accessible to borrowers in a wide variety of ways.
What do you need to know about this kind of borrowing? Read on and we’ll walk you through the basics.
What is a Forgivable Loan?
What does it mean to get a forgiven loan? This is a particular type of loan where the borrower could have the debt forgiven if they adhere to and meet a certain set of given criteria.
These exact criteria will vary highly depending on the loan, the lender, and many other factors. For example, a borrower could work for a certain employer, offer services to a certain community, or use the borrowed funds in a specific manner.
Many lenders who offer forgivable loans do so with the overall assistance of the federal government. For example, some loans that are given out via the Department of Education or the Small Business administration are forgivable.
The government is willing to subsidize some of these loans in order to help out Americans who need them the most.
Forgiving a loan doesn’t always mean forgiving all of a loan, and there are many scenarios where a borrower still pays back a good portion of this kind of loan. Still, the money saved can be quite significant as well.
Applying for a Forgivable Loan
As we mentioned, there are many different entities that offer this kind of loan to borrowers in need. The application process, and thus the approval process, for each of these loans, will end up looking very different.
Thus, it’s important to start this process by seeing what kind of forgivable loans you may be eligible for. If you do any kind of work for your community or are part of any kind of marginalized community, it can be worth looking into what opportunities are out there.
There might be more opportunities out there than you might initially imagine.
For example, there are these loans for independent contractors. There are all kinds of forgivable loan options out there, you just need to do your research and determine where to look.
Managing Loan Debt
What is a forgivable loan?
If you’re worried about getting into debt but need financial assistance, forgivable loans are certainly worth learning about. The above information can help fill in all you need to know about these helpful financial concepts.
Need more personal finance advice and information? Keep scrolling our blog for more helpful articles.
