Last updated on December 23, 2021
If you are struggling to make ends meet or pay for an emergency, this guide can help you with safe and affordable options to high-cost loans. It includes ways to lower your bills and find other sources of one-time income, as well as lower-cost loans. Most of these options do not require you to take on more debt.
There are many ways to lower your expenses or debts. You may be able to negotiate with your creditors to lower what you owe. Most companies have programs to help customers experiencing COVID-related hardship. Tell your creditors and other companies to whom you owe money if you are experiencing a COVID hardship.
TIP! Prioritize Essential Expenses First
Pay for essential needs before anything else. Essentials include shelter (mortgage or rent), food, and utilities. Before an unpaid bill can be reported to the credit bureaus, which would harm your credit score, it must be at least 30 days late. A single late payment fee is preferable to a high-cost loan, which will cost you much more in fees. If you are uncertain about which option might be preferable, you can always call Capital Good Fund’s financial coaching hotline at 866-584-3651.
Homeowners: If you are struggling financially, consider obtaining a COVID forbearance, which enables you to postpone paying your mortgage. Without your monthly mortgage expense, you will be better able to pay for your other expenses. The easiest way to obtain a COVID forbearance is to apply on your mortgage servicer’s website. Alternatively, you can call them and ask for a “COVID forbearance.” If you have a COVID forbearance already that has or is close to expiring, visit your mortgage servicer’s website to apply for an extension or call your servicer.
If you have a complicated situation or are encountering obstacles, find a housing counselor near you. Call 888-995-HOPE (4673) to be connected to free, comprehensive, foreclosure assistance 24/7.
Renters: Obtaining rental assistance can take a lot of pressure off your overall finances. Information about available rental assistance options and applications is available at IllinoisRentalAssistance.org and Housing Action Illinois. Another site, rentervention.com, focuses on Chicago residents, but can assist any Illinois resident. Check the Consumer Financial Protection Bureau’s search tool for more local and County rental assistance programs across Illinois. If you’re being threatened with eviction, visit EvictionHelpIllinois.org for free legal assistance.
Housing Counseling: Housing counselors can provide advice on buying a home, renting, loan defaults, foreclosures, and credit issues. Many housing counseling organizations do financial wellness education at no cost to the participant. Local Chicago examples are Spanish Coalition for Housing and Chicago Urban League. Check IllinoisHousingHelp.org and sign up for email alerts to learn when the Illinois mortgage assistance programs are open.
Contact your lender. Options may include changing the due date of your payments, creating a new repayment plan to lower your monthly payment, or deferring (postponing) your payments.
Each major Illinois utility has its own bill assistance program: ComEd, Peoples Gas, North Shore Gas, Nicor, and Ameren. Explain that you are experiencing a COVID hardship. This will help you access funds and policies set aside for COVID support.
If you are lower income, contact both your utility provider and the state utility assistance program. For help with gas and electric bills, visit the State of Illinois Utility Bill Assistance website or call 877-411-WARM (9276) (Mon–Fri, 8 am–5 pm). For help with water and sewer bills, visit HelpIllinoisFamilies.com to learn more about Illinois’s new assistance program.
The federal government’s Emergency Broadband Benefit (EBB) Program and the new Affordable Connectivity Program (ACP) can help low-income households pay their monthly internet bill. Eligible households can get up to a $50 per month discount on their internet bill. Households that are fully enrolled in EBB by December 31, 2021 will continue to receive the benefit until March 1, 2022 while they transition to the ACP program. Visit GetEmergencyBroadband.org to find out if you are eligible and apply for EBB. More details on applying for ACP coming soon.
President Biden extended the COVID-related loan payment suspension on certain federal loans to May 1, 2022. If your loans are not covered by the President’s order or if you are unsure, contact your student loan servicer and explain your hardship. We recommend you begin preparing now to make your payments in May.
When talking to your loan servicer, ask about an income-driven repayment plan (making your payments affordable based on your income), a deferment of payments, or a forbearance, which is a temporary pause making loan payments. A new, free online service called Summer can help you simplify your loan payments and maximize savings.
Many people pay their bills through automatic, recurring payments (e.g., subscriptions, gym memberships, loans, credit cards). Contact the companies that deduct money through autopay to request COVID-hardship relief. They may be willing to temporarily freeze your account. If that’s not an option, you have the right to revoke your authorization for the company to deduct money. You will probably still owe the company money, but you can manually control the timing of the payment and make the payment only after you have paid for essential items.
Major credit card companies have COVID assistance programs. Visit the credit card company’s website. If you cannot find one online, call them to request COVID relief. Most companies will allow you to postpone paying your bill for a time without incurring late fees.
Contact the medical provider/biller and explain that you are unable to pay the bill due to a COVID hardship and request a payment plan. If you do not have success with one representative, ask to speak to a supervisor who may be able to help more. Medical providers would rather put you on a payment plan than refer the account to a collection agency.
If you owe child support and are unable to make the payments, first notify the person who receives the support. The State of Illinois also provides free child support services. Complete an online application for services. You can also call 800-447-4278 or visit any Department of Child Support Services office. These services can also assist you if you are owed child support.
If you cannot afford to make your child support payments, the court may modify your obligation if you have lost your income or have another major hardship. The Greater Chicago Legal Clinic has a helpline to learn more at 312-796-3070. Illinois Legal Aid Online has an online guide to help you with paperwork.
Request a payment plan. If you already have a payment plan but are unable to afford the monthly payments, ask to adjust the plan.
Collection agencies would rather you pay something than refer it to their lawyers to collect through the court system. Staying in communication with them is most important. If a creditor or collection agency has sued you or is threatening to sue you, call legal aid.
Tip! Free and Discounted Essentials
Many charities provide free food, free clothing, and other essentials. Catholic Charities locations across Illinois offer assistance regardless of your religion. A financial coach can also help direct you to resources.
Many people turn to a high-cost loan for a large one-time expense. This section includes ways to access additional income without increasing your debts. Before turning to a loan, consider these sources of potential income.
You could be eligible for thousands of dollars in tax refunds by filing your taxes. Even if you don’t normally file taxes, you can still file. There is no penalty for filing late if you don’t owe the IRS any money. File as soon as possible to get your refund. Most programs to help people file taxes for free are available from January to October.
If you received monthly, advance payments of your Child Tax Credit in 2021, you are probably eligible for the Child Tax Credit in 2022, which you can receive by filing your 2021 income taxes. If you did not enroll in the monthly advance payments of the Child Tax Credit, you can still claim the full amount that you qualify for by filing your 2021 income taxes.
If you haven’t received one or more stimulus checks that were issued in 2020-2021, you may claim the Recovery Rebate Credit on your taxes to receive it. Many low-income people are also eligible to receive money from the Earned Income Tax Credit (EITC). Learn if you are eligible for the EITC.
Filing your current year taxes online and using a bank account number for direct deposit will help you get the money much more quickly. If you didn’t file taxes in the last two years but think you might be eligible for these tax credits, you can still file a paper return for those years to receive your past refunds.
In Chicago, Ladder Up offers free tax assistance to eligible families. Ladder Up also has pro bono attorneys available for more complicated tax situations.
The federal government now has a program to reimburse the costs of funerals for deaths attributed to COVID-19 (according to the death certificate). The maximum benefit is $9,000 per burial. To be eligible, the funeral must have occurred after January 20, 2020. For more information, including required documentation, go to their website. To apply, call 844-684-6333 (multilingual services available). They are not accepting online applications.
If you are employed, ask your employer for an advance on your next paycheck. There are many companies and apps that also offer this option. However, terms and fees vary widely and they can become a debt trap. Beware the “voluntary tip” feature associated with many apps. Many apps are configured to require you to repeatedly opt out of the tip to avoid paying it. At this time, there are no companies we recommend for early paycheck access.
Many churches provide financial and other assistance. For example, Catholic Charities agencies across Illinois have financial assistance programs for families regardless of religion.
Tap into your savings. Chances are you have already exhausted any money in a savings account, but you may also have retirement savings (401k, IRA, etc.). It is never ideal to deplete your savings or tap into retirement accounts, but it is one way to boost your income in a major financial emergency. There are tax consequences, and you may have to adjust how you save for retirement going forward. You may want to consult with a licensed accountant or a certified financial planner.
If you’re willing to part with an item (i.e., gold jewelry, designer clothes, or antiques) consider selling it rather than getting a pawnshop loan to avoid paying financing charges. Poshmark is a widely used app for this.
If you have taken all possible steps and still need help, you should consider a lower-cost, short-term loan. Here are some affordable loan options—all of which charge 36% annual percentage rate (APR) or less.
Visit your bank’s website or call to find out whether they offer emergency loans or loans specifically tailored to those experiencing a COVID hardship. If you don’t have a bank account, visit Bank On Chicago if you live in Chicago. If you live outside Chicago, visit Bank On Illinois. A financial coach can also assist you with opening a bank account.
With a Bank On certified account, you will not be charged overdraft fees, but some BankOn accounts lack certain account features – like access to affordable loans – that are available only with a bank’s other accounts. Capital One no longer charges overdraft or non-sufficient fund fees on any of its accounts. Not a Bank On account, PNC’s Virtual Wallet account has a feature called Low-Cash Mode that gives customers more time to fund their account to avoid an overdraft situation and, for each transaction that would overdraw the account, allows customers to elect whether the bank should clear the payment or reject it.
CIBC Bank has an affordable (12.45% APR) personal loan called the EasyPath Personal Loan. Even if you are not a CIBC customer, you can apply for the loan by visiting one of CIBC’s branches.
Huntington Bank offers a line of credit to eligible account-holders called Standby Cash. The line of credit is up to $1,000 and is interest- and fee-free if the customer enrolls in automatic payback of the loan.
US Bank offers personal loans to both customers and non-customers who have a minimum credit score of 660. The interest rate ranges from 5.99% to 18.49% APR.
Consider a loan from a Community Development Financial Institution (CDFI) or credit union:
Not all online lenders are affordable. However, members of the American Fintech Council (AFC) adhere to responsible lending standards that include charging at or below 36 percent APR. All of the following are AFC members.
Personal Loans
Banking and Loans
For Purchases
Business Loans and Lines of Credit
You can compare different loan products at Nerd Wallet, but we cannot guarantee that a loan that appears on Nerd Wallet is consumer friendly.
In a lending circle, a small group of people chip in every month and lend money to one another at no interest. Lending circles are formed between 6-12 people and loan amounts range from $300-$2,400. Each month, a new member of the lending circle receives the loan until everyone in the group gets their chance. Loan payments are reported to the credit bureaus to help participants build credit.
This option is not suitable for immediate needs or emergencies. A lending circle requires group planning, and you may not be able to predict when it will be your turn to get the loan. However, it may be helpful for large, planned purchases. You can learn more and apply.
Cash advances from credit cards can be easy but are expensive unless you pay them back soon. Check the credit card’s website or contact the credit card company to find out about available options.
Tip! Avoid Extravagances
Buy Now, Pay Later is an increasingly popular option for consumers to buy luxury items and other extravagances. There are significant financial risks associated with doing this. Proceed with caution.
Watch Out for Scams!
Scam artists are always looking for ways to cheat you, but COVID-relief programs have triggered an avalanche of scams and rip-offs.
For more information about scams, visit the Consumer Financial Protection Bureau’s website.
Capital Good Fund’s financial coaching hotline provides one-on-one financial advice to any Illinois resident. Starting at $15 per month, the nonprofit can create a plan with you and can advocate on your behalf with creditors. They also offer a credit-builder program for $5 per month. Call 866-584-3651 (English or Spanish)
The City of Aurora’s Financial Empowerment Center provides free, high-quality, one-on-one financial counseling to low-and moderate-income residents of the Aurora region. Learn more.
This resource guide is produced in partnership with New America Chicago, Woodstock Institute, and Financial Inclusion for All Illinois.
Special thanks to all the hardworking nonprofits, socially-conscious lenders, and community partners who are helping restore wealth in our communities. Your work is so important! Thanks also to Jane Doyle, Brent Adams, Amy Eisenstein, Vanessa Rangel, Gordon Mayer, Meegan Dugan Bassett, Bob Reddy, Joe Wilkes, LuLin McArthur, and Lauren Monaco Grossman for their work on this project.
