Grants are available for a variety of purposes, from government agencies, to nonprofit and for-profit businesses. The general intention of a grant is to pay for work that's used to improve the common good. Although it's tempting to believe that there are grants available for the purpose of repaying personal debts, unfortunately, it's not the case. Don't despair; there is help available for those in need.
Risky Business
Borrowers should not attempt to secure a grant for the purpose of repaying a personal loan. In fact, businesses that claim to be able to secure a grant for you for this purpose may be attempting to steal your identity.
Legitimate grant applications never ask you for your personal information, such as your social security number, credit card number or bank account number. There's no charge to apply for a grant, either; if you are being asked to pay a fee or provide this information, the business may be operating illegally.
The newest scam that these companies operate with is to use this personal information to establish new credit accounts in your name. Of course, the bills never get repaid and your credit is trashed. Don't hesitate to order a free credit report at AnnualCreditReport.com. If you notice unusual activity, report it immediately. Also file a complaint with your state attorney general.
Mortgage Debt
The housing market's downturn in 2007 was a domino reaction that affected the entire economy. As a result, the federal government launched the Making Home Affordable program. HAMP and HARP, the two most popular programs, are intended to bring the housing downturn to a screeching halt and help more Americans manage their monthly mortgage payments.
HARP is restricted to those who have FHA-backed loans. This program is a "streamline refinance" and can save you hundreds, maybe thousands, of dollars a year with little paperwork. HAMP is open to those who have conforming loans and whose lenders are participating in the program -- most are. HAMP aims to reduce the homeowner's payment to 31 percent of pretax income. This is accomplished through a variety of techniques, each specific to the homeowner's loan and predicament.
Both programs require that the homeowner apply directly through the lender, not the government.
Opportunities for Small Businesses
Small businesses have traditionally had longtime support from the federal government. Those who are getting a new business off the ground or who need a hand taking the next step can apply for a microloan or a small business loan. They're available up to $2,000,000. Remember that these aren't grants -- they're loans -- and must be repaid. Borrowers may need to meet certain credit and income criteria to qualify, and must also apply through a participating lender.
Help for Debt Problems
Real debt help comes from nonprofit credit counseling agencies that charge little in the way of fees, are top-ranked members of the Better Business Bureau and offer educational programs for consumers. There are several good debt relief agencies, but the best is the National Foundation for Credit Counseling (NFCC). The NFCC doesn't provide loans (or grants), but it can enroll you in a debt management plan to help you repay your loans in full. Debt management plans can only be used for unsecured debt. However, the NFCC provides housing counseling, too (and bankruptcy counseling, if you need it).
A good resource for those who need help with debt is the Federal Trade Commission. The FTC is a government agency that protects the rights of consumers and provides general advice and information for a variety of topics. The FTC has issued many warnings about debt relief grants. It's also provided a great deal of valuable information that consumers can use if they're deep in debt.
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