Hardship grants for individuals: A guide to assistance

When money is tight and you're having trouble paying your bills, borrowing more money may not be the best choice. Hardship grants for individuals and families are free money that may provide the financial assistance you need. 

Learn about financial hardship grants, low-interest loans, and alternative ways to access cash to pay your bills quickly.

What are hardship grants?

Hardship grants are a form of financial assistance for individuals and families who are unable to pay regular or unexpected expenses. Grants are a form of free money. Unlike a traditional loan, grants do not incur interest charges, nor do they have to be paid back. Money from grants typically comes from local, state, or federal government agencies, private companies, non-profit organizations, or community groups.

Types of hardship grants for individuals and families

There are numerous types of grants for individuals and families that provide financial assistance to those in need. Some are grants, which are free money that doesn't have to be paid back, while others are no or low-interest short-term loans with favorable repayment schedules.

Here are examples of hardship grants that you may qualify for. This is not an exhaustive list, so be sure to search for local and federal grants to find others that you are eligible for. 

While searching, be cautious of grant scams — some claim to provide help but don’t actually offer financial assistance and may ask for personal information.

Government-funded grants

There are numerous government grants designed to help cover expenses that you cannot afford. These government programs are available at the local, state, and Federal level, so be sure to explore all programs that apply to you.

• Temporary Assistance for Needy Families (TANF). TANF is a federally funded assistance program that is run by the states. It is more commonly known as welfare, and it provides free money to low-income families for food, housing, home energy, and childcare. TANF also offers job training and help with tuition payments to help recipients increase their incomes. The average monthly benefit is $549, which is an 11% increase over the prior year.
• Low Income Home Energy Assistance Program (LIHEAP). LIHEAP provides financial aid to 6.7 million households through block grants to local agencies. This free money helps households prevent utility shutoffs and cover heating and cooling bills. Assistance varies by location, but the one-time benefit in Washington, D.C., ranges from $250 to $1,800.
• Supplemental Nutrition Assistance Program (SNAP). SNAP gives low-income families free money to supplement their grocery budget. This financial aid is designed to help families afford nutritious food, like fruits, vegetables, dairy products, and meat. It cannot be used for alcohol, tobacco products, fast food, or non-food items. The average household with children receives $574 per month, or $332 for families without children.
• Emergency Solutions Grants (ESG) for housing. The U.S. Department of Housing and Urban Development (HUD) operates this hardship grant that enables people to quickly regain permanent housing. Whether you're facing a housing crisis or experiencing homelessness, this financial aid program provides free money for emergency shelter, homelessness prevention, repaid re-housing, and more. Many of the ESG awards go to state and local governments, community organizations, public housing authorities, and tribal entities.

Nonprofit and charitable grants

Personal hardship grants may also be available from nonprofit organizations and charities. Many nonprofits and charities serve their local communities, while others serve wider audiences across their state or the country.

• Salvation Army assistance programs. The Salvation Army is a charitable organization that provides hardship grants to families in need of assistance with rent, mortgage payments, utility bills, or prescription medications. In addition to its own financial aid, it also connects people with local resources that may also provide free money.
• Modest Needs Foundation. This organization operates like a crowdfunding platform where people can share stories and donors can contribute to their cause. Applicants do not pay a fee, and the money does not need to be repaid. While the maximum grant is $1,000, the average hardship grant is $180. The money raised is paid directly to the creditor, rather than to the applicant.
• Catholic Charities. Catholic Charities is a national network of agencies that works to reduce poverty across the U.S. by providing financial aid to those in need, regardless of their background or religious beliefs. Award amounts vary by location and the type of hardship grant requested.
• United Way 211 network. The 211 network connects people in need with confidential experts who can guide them to local resources that offer the assistance they need.

Pandemic or disaster relief grants

You may be eligible for financial aid through special programs due to natural disasters, like hurricanes, flooding, or wildfires, or pandemic-related illnesses, like COVID-19.

• FEMA Individual Assistance. The Federal Emergency Management Agency (FEMA) offers financial aid to families and businesses when natural disasters hit. You may receive assistance with displaced housing, home repair or replacement, hazard mitigation, and more. Additionally, financial aid is available to pay for essential items like food, water, medication, and toiletries.
• Local or state emergency relief funds. Local governments also offer hardship grants to families to help with disaster relief. Examples include the Indiana State Disaster Relief Fund (SDRF) and the Virginia Disaster Relief Fund.

Alternatives to hardship grants

Hardship grants provide a valuable source of funding for people in financial need. While these grants help many people, they may not offer enough money to meet your needs, or you may not qualify at all. In those situations, consider these financial alternatives that may be a better option.

Crowdfunding platforms

When families are going through hard times, many turn to crowdfunding campaigns to get the money they need. Popular sites like GoFundMe allow those in need to solicit donations for their causes. Since the money is a donation, you don't have to pay it back, but the platform usually takes a percentage of the money you raise. Common crowdfunding requests include the unexpected death of the family's income earner, launching a new business, covering medical treatments, and money to pursue a once-in-a-lifetime experience.

Crowdfunding sites don't require a credit check or income verification, but there's no guarantee that you'll receive the money you need.

Short-term interest-free loans from nonprofits

Non-profit organizations have a mission to help those in need within their communities across the country. While many think of nonprofits as offering food and shelter or necessary services, some also offer short-term loans to those in need. 

Unlike a bank that is trying to make a profit on money it loans out, these nonprofits offer interest-free or low-interest loans to qualified borrowers. However, some nonprofit lenders require borrowers to have a guarantor or co-signer to ensure they are paid back.

The amount you can borrow and the repayment terms vary from one nonprofit to the next. Additionally, qualification for the loans based on income, assets, and reasons for the loan will also vary. For example, the Jewish Free Loan Association offers interest-free loans of up to $15,000 for housing stability, student debt consolidation or access to medical, dental, or pet care.

Payment assistance programs from utility companies or hospitals

People are who are struggling with utility bills and medical expenses can find relief through payment assistance programs. The income and asset thresholds vary by program, but individuals and families should contact their providers to discuss which programs are available. 

Providers may be able to provide discounted or free services, offer extended payment plans with no or low interest rates, or reduce your outstanding balance. Keep in mind that some providers have a limited budget for their payment assistance programs. Once they run out of funding, you may have to wait until their next fiscal year begins.

Secured financing

If you own your own home, tapping your equity can be a good way to cover your financial troubles. A cash-out refinance, home equity loan, or home equity line of credit are common ways to pull money from your home. However, these loan types usually require good credit and consistent income. For people struggling with their finances, this may not be a realistic option. A home equity investment (HEI) allows homeowners to access their equity without signing up for monthly payments, even if their credit score is less than perfect or they cannot prove their income.

Another option for workers with a company retirement plan is a 401(k) loan. For companies that allow them, you can borrow up to 50% of your vested 401(k) balance or $50,000, whichever is less. While they are appealing because there aren't any credit checks and approval comes quickly, these loans must be repaid within five years, with interest. If you leave your job or are fired, you must repay the remaining balance quickly to avoid it being counted as a distribution, which may incur penalties and income taxes on the amount owed.

Final thoughts

Hardship grants for individuals and families are available through various government programs, private businesses, and community organizations. Eligibility varies by program and the types of aid you apply for. A grant is free money that does not need to be repaid. However, award amounts may be less than you need. If you are ineligible or the award amount is too low, consider applying for multiple grants or exploring alternative financing options to get the money you need.