Everything You Need to Know About a Single-Parent Loan

A single-parent loan is designed for parents raising children on their own. Contrary to low-income loans, these loans have more favourable and flexible terms and lower interest rates. If you’re struggling due to the absence of your spouse, they could be a solution to your financial dilemmas.

We’ll tell you everything you need to know about these loans, so continue reading!

What this article covers:

What Is a Loan for Single Parents?

It provides a lifeline for parents financially struggling without a partner or spouse. Since raising a child is expensive, averaging around $170 per week, or about $160,000 from birth to 18, these loans offer a way for those raising a child by their lonesome to cover essential expenses, such as rent, utilities, childcare, education, or medical expenses.

Although they’re a type of loans for short term, they have more generous repayment terms and lower interest rates with the cost of specific eligibility conditions.

single parent loan

How Do Single-Parent Loans Work?

Contrary to second-chance loans, the single-parent loan scheme has stricter eligibility conditions but more lenient repayment terms. One of its conditions is providing proof of income and parenthood.

There are no dedicated government loans for single parents in Australia, but the government provides single parents with several benefits. For an actual loan, you’ll have to turn to a government-backed organisation or a private lender.

Private lenders offer several loan types, including loans on settlements, loans for casual workers, traveller’s loans, and loans for job seekers.

The information you’ll have to provide differs depending on your loan type—more on this later— but the loans are quickly processed and deposited into your checking account, making them an ideal solution if you’re facing an emergency.

However, you may not be eligible for a loan if your child is above a certain age. For example, if they’re above 18, they’re considered adults. There are, however, loans for 18 years old and loans for students designed for their needs.

Repaying the Loan

A loan for a single parent is repaid through weekly, fortnightly, or monthly direct debits from your bank account. You and your lender should agree on a repayment plan considering your financial status. You may also be eligible for a longer repayment term, even if you have a regular source of income.

Loan Interest

Thankfully, these loans have less brutal fees and interest rates, which is ideal for single mothers or fathers working low-income jobs. However, as always, ensure you’re able to fully repay your loan before taking it and repay it on time to avoid any complications. If you’re unable to, contact your lender for an alternative repayment plan.

single parent loans

How Can I Apply for a Single Parents Loan

To apply for a single-mother loan or single-father loan, head to a lender finder, such as Orange Loans, and submit an application in which you’ll designate the amount of money you need, what for, and your personal information. The lender-finder will get in touch with a private lender suitable for your situation and connect you with them.

But asses your situation before you apply! Consider your needs and how long it’ll take to repay the loan to prevent overborrowing and, consequently, overwhelming yourself with repayments. For example, if you simply need household appliances, loans for white goods may be better suited for you.

Once you get in touch with your lender, they’ll ask you to submit your personal information, as well as the terms you’re most comfortable with. Once you agree, your loan will be deposited into your checking account within 48 hours.

What Information Do I Need to Provide?

We recommend you have everything ready before you apply to ensure a fast application process since private lenders often review and approve applications quickly. 

For single-parent loans, the following information is required but may differ depending on your lender:

  • What you’ll need the money for 
  • Your proof of parenthood 
  • Your proof of income
  • Your identifying information and contact details
  • Your recent banking history and banking transactions
  • Your bank account
  • 100-points of identification

Note that single-parent loans are very versatile, and carefully consider your employment, income, expenses, and marital status. Your lender may offer options for loans on benefits for parents, ideal for individuals with extenuating situations.

loans for single parents

The Bottom Line

Loans for single parents offer a solution for individuals struggling with raising a child on their lonesome due to their financial situation. They’re a versatile funding option ideal for taking care of an emergency or covering essential expenses, such as daily necessities, education, utilities, and housing bills.

Since government single-parent loans aren’t available in Australia, turning to private lenders is an option. However, don’t be discouraged by that notion – these loans come with generous repayment terms, low fees, and interest rates!

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