How Can a Felon Get a Loan?

After being released from prison, felons face many challenges in the months ahead.  Jobs are difficult to find because of their felony conviction.  This places even more pressure on felons who are trying to support a family.

When finances become especially tight, felons, as other people do, turn to applying for a loan to help them get through that difficult time, or to start their own business.

This blog post will cover the process of getting a loan.

  • Reasons for Getting a Loan
  • Finding a Loan Resource
  • Student Loan
  • Supporting Felons in Starting Over

Reasons for Getting a Loan

Loans are money to be borrowed and repaid with certain terms.  Those terms may vary, so it is important to read those terms carefully and understand them prior to getting that loan.

There are different reasons for seeking a loan.  It may be to pay basic living expenses while getting re-established.  It may be to pay outstanding medical bills, help with housing, to return to school, or to start a business.   Regardless of the reason, getting a loan as a felon isn’t impossible and there are still options out there.

One of the really challenging needs for a loan is to buy a car.  Felons who are able to secure employment usually require transportation to get there and back, so a loan becomes crucial if you have landed a job and need reliable transportation.

Finding a Loan Resource

It is often thought that as far as getting a loan, as with so many other aspects of their lives, that there are stipulations to prevent a felon from obtaining financial assistance.  The fact is that going through the incarceration that comes with a felony conviction often is so costly that the process ends up affecting their credit rating to the extent that they no longer qualify for most conventional loans.

Typically, financial institutions make decisions on giving out loans based on their assessment of risk in having the loan repaid.

The less likely they view a potential borrower to repay the loan, usually the higher the interest rate.  Having a felony conviction may cause banks to see the felony as an indication of a lack of reliability.  the good news though is that there are other types of loans available instead of conventional loans from a bank or other financial institution.

The different loan sources for felons are as follows:

  • Peer to Peer lending:  We are advocates of using a peer-to-peer lending service called   We have contacted and personally confirmed that your felony has absolutely no impact on whether you will be approved for a loan.  This platform only cares about your financial situation and is willing to take on high-risk loans for as well.
  • Payday loans:  Typically these loans have a high interest rate and you have to already have a job to be able to qualify for them.  If you need a quick $500 – $1000 and already have a job, it may make sense to look into a payday loan.

Felons wanting to start a business, will have difficulty getting a loan from the Small Business Association (SBA) due to the fact that the SBA will not make loans to anyone who has committed a crime of “moral turpitude”.   This usually means having to turn to private funding to obtain enough money to start a business.

The good news with this is that, again, is willing to give small business loans regardless of your history.

Of course, felons’ credit score will be an important factor here.  But credit scores are critical for anyone, even without a felony conviction in applying for a loan.

Student Loan

Many felons, once released from prison, return to school to get the education and training they need to get ahead.

Felons can qualify for student loans.  In fact most people, even though they do not have a felony, can qualify for a student loan, as long as they have a strong enough credit rating.

Those with a felony drug conviction, however, are not eligible for a Federal student loan if they were convicted while they were receiving federal student aid previously.

In order to qualify for a student loan, felons must demonstrate financial need, which is usually easy to do.

They must also be a U.S. citizen or eligible non-citizen.  Felons must have a valid Social Security number.

They must be enrolled or accepted for enrollment as a student in an eligible degree or certificate program.  Felons must be able to prove they have a high school diploma or GED.

Supporting Felons in Starting Over

Starting over after being released from prison is quite challenging.  For felons trying to start over involves beginning a way of life that does not involve crime.

For many, they will be required to make many changes to get out of the criminal mindset and achieve an honest life.

Those who apply for and get a loan will need encouragement to stay on track, remembering the purpose of the loan and remaining focused on repaying that loan.

Be there to help those loved ones as they move forward.

So what do you think about this blog post about how to apply for a loan?  Have you or someone you know tried to get a loan as a felon?  What was that like and were they successful?   Please tell us in the comments below.


loans, loans for felons, small business loans

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