Can Felons Get Loans?

Different Types Of Loans

If you’ve been incarcerated for a while or have never taken out a loan, you may be wondering what borrowing arrangements are available. Here are some standard loans that people use to finance their purchases without having to wait until they have sufficient cash saved:

• Credit-builder loans – True to their name, these loans help you build your credit score as you pay back what you borrow. Credit-builder loans often do not require credit checks, making them solid picks if you have bad or no credit. The only downside is the amount you can borrow is low and in the $300 to $1,000 range.
• Payday loans – These loans are best avoided since they can carry triple-digit interest rates and put you into a significant financial hole. While payday loans may not check your credit, they require repayment from your next paycheck and are costly.
• Student loans – Felons may qualify for student loans from the federal government or private lenders to help finance their studies. Federal student loans usually require no credit check.
• Car loans – If you need reliable transportation for work and getting around town, you will probably need to take out a car loan. The worse your credit, the higher the interest rate you’ll pay.
• Personal loans – A personal loan can be used for various purposes like paying bills, going on vacation, covering medical expenses, improving your home, and more. Felons may qualify for personal loans, although the interest rates may be high depending on credit, income, etc.
• Debt consolidation loans – If you have deep debt from multiple lenders or credit cards and want to simplify your repayment and enjoy a lower interest rate, a debt consolidation loan can help.
• Home loans – A mortgage can help you buy a home, so you don’t waste money on rent.

Can You Get A Loan With A Felony On Your Record?

Contrary to popular belief, having a felony will not prevent you from getting loans. Will you qualify for every loan you apply for? No, as each has its own requirements. However, as long as you have decent credit, a steady income, or can at least get a co-signer, you may get a student loan, small business loan, personal loan, car loan, and even a home loan as a felon.

Getting A Home Loan As A Felon

Some lenders may not run background checks, which means you could get a home loan to buy a house despite your past. What’s more important is your credit score and income, which reflect your ability to repay the home loan.

If you are worried that your felony will prevent you from getting a mortgage, look for lenders that do not run background checks. And if you are looking for a specific type of home loan that’s particularly helpful for felons, research FHA loans. These home loans are insured by the Federal Housing Administration and have more flexible eligibility requirements and lower interest rates than other mortgages.