Taking out a loan every now and then is a normal part of life. There comes a point in a person’s life that money is hard to come by hence, the best option is to apply for a loan. Let’s face it, these different types of loans provide relief during tough times whether you’re a student, a professional or an entrepreneur.
Unfortunately, there are also circumstances people don’t expect that cause them to miss their loan payments. They encounter accidents at home and in the workplace and get injured in the process. And since they need to be spend for their hospital bills and other expenses, they fail to fulfill their financial obligations to the lender.
So what can you do in the event you are injured while performing your work and you still have loan payments to make? You have several options to choose from but first, you must inform your employer about your condition and contact a personal injury attorney if your injury was caused by a co-worker. You also need to get a medical certificate and tell your manager how long you might not be able to work. You can then decide to use up your remaining vacation and sick leaves so you can continue getting a pay check and still keep your job.
Avail of Social Security Disability Benefits
If your injury is severe, you may need to apply for social security disability benefits. The financial support you will get here will be based on your earnings and contributions. This means that the more you’ve contributed, the higher will be your disability benefits.
In certain states in the U.S., however, injured employees are allowed to avail of benefits through the temporary disability insurance under a state-run program. This private insurance will pay partial wage replacement for a period of six months to a year. It will pay from 50 percent to 80 percent of your gross monthly salary until the time that you can go back to work.
Get a Loan Protection Insurance
You can also inquire about adding a loan protection insurance in your existing personal loan. This may not even require a medical examination or additional cost regardless of your age, job or health record. Most insurance providers also allow policy holders to claim even if they avail of benefits from other sources such as a worker’s compensation or sick leave.
There’s also insurance to pay your credit balances. The credit life insurance will pay off all or part of your loan if you die, the credit disability insurance will pay your loan if you can’t work due to illness or injury while the involuntary unemployment insurance applies if you lose your job and it’s not your fault.
With regards to mortgage, you can get protection either from your lender or from independent insurance firms. In the event of your death, the insurance will be paid directly to the lender to pay off your loan. It should be understood, though, that this is separate from a private mortgage insurance (PMI) which is usually required if you make a downpayment of less than 20 percent to your house.
Another option is to ask your mortgage lenders about the home affordable modification program. This will allow borrowers to modify their mortgage payment depending on their financial capability.
Get a Loan Forgiveness
For working students, they can negotiate for a loan forgiveness. A loan forgiveness refers to the cancellation of all or certain parts of a federal student loan balance. When you are granted forgiveness, you no longer have to repay the loan you owe.
But while this is possible, a student needs to meet the eligibility requirements first before being granted a loan forgiveness. Only certain situations are allowed such as total or permanent disability for members of the U.S. Armed Forces, Peace Corps and law enforcement agencies.