Should You Take Out a Personal Loan to Help Support a Family Member?

Love is a powerful motivator. According to A Place For Mom, 17% of the U.S. adult population spends an average of 23.7 hours per week providing unpaid care to a loved one they don't live with. Among those who live with the loved one, the time per week spent providing care jumps to 37.4 hours. 

The fact that the average caregiver's age is 50.1 years means caregiving duties hit during prime money-making years, often cutting into a person's ability to save for their future. Given that the average time spent caring for a loved one is 4.5 years, it's no surprise that some caregivers face financial hardships. Here, we look at whether taking out a personal loan to look after someone they care deeply about is a good idea. 

The cost of care 

When a parent, spouse, or child cannot care for themselves, someone must step into the breach. However, hiring a company to provide in-home care is expensive. For example, the national average cost of 24-hour companion care or 24-hour home healthcare is approximately $20,000 per month, or $28 to $32 per hour. 

The average family simply cannot pull that kind of cash out of their checking account, leaving it up to a family member to take over care duties. There are two primary reasons one of these caregivers may consider a personal loan:

1. To make up for the money they're not earning as they care for a loved one.
2. To cover the extra costs associated with the care of their loved one.

Extra expenses

Unless the person they're caring for has enough money to cover the extra expenses a caregiver can face, the caregiver must figure them out on their own. This includes: 

• Medical needs, such as prescriptions
• Accessibility devices, including wheelchairs, walkers, and hearing aids
• Transportation-related costs
• Personal needs, including incontinence supplies, lotions, and bandages
• Home remodeling for accessibility

Will a personal loan help?

A personal loan can be an excellent tool for someone who wants to repair their home, consolidate high-interest debt, or pay for a wedding. But a personal loan only makes sense when it fits into a borrower's budget. 

If you're considering a personal loan to cover care-related expenses you don't have the money for, you may be digging a difficult hole to climb out of. Here are a few reasons why:

• While taking out a loan to pay for a loved one's needs seems like the kind thing to do, it could leave you in a precarious position. One day, you may need care of your own, and anything you spend money on now is money you won't have to pay for that care later. 
• Unless you can afford the monthly payment, taking on new debt can lead to late payments and a drop in your credit score. The lower your credit score, the more difficult it will be to qualify for a loan in the future. 

What to do instead

To give you an idea of the types of services available to caregivers, we'll look at a sample of services provided in Illinois. 

• IL Department of Aging (IDoA) Caregiver Support Program: Provides financial assistance to eligible unpaid caregivers in the state. It also offers respite care, counseling, education, and training to support caregivers. It may also provide a small reimbursement for caregiving-related expenses. 
• Adult Day Services Program: IDoA also offers the Adult Day Services Waiver, which provides financial assistance to caregivers through the Adult Day Health Program (ADHP). 
• Community Care Program (CCP): A Medicaid-funded program offering services to help older adults stay in their homes. Through this program, your loved one may receive homemaking assistance, personal care, and other supportive services. In some cases, you may be eligible for payment as a caregiver. 
• Illinois Home Services Program (HSP): As another Medicaid-funded program, HSP allows eligible individuals to hire personal assistants to provide in-home services, including personal care and homemaking. The recipient of care can employ family members as their paid caregivers. 
• Aged, Blind, and Disabled Program (ABD): This program offers healthcare coverage, support services, and sometimes cash assistance. 

And this is just a sample of services offered by a single state. No matter which state you live in, services are available to you. As lonely as caregiving can be, you don't have to go it alone. You should never have to go into debt to provide care.