Searching for a loan that can cover big expenses or ease your debt burden is tricky when you rely on benefits. However, being a welfare recipient does not rule out your chances to get a loan. Through a specialist lender like ourselves, you can access the funds you need and pay them back with your benefit income. Read on to learn more!
From time to time, everyone finds themselves in a situation where money doesn't stretch far enough. An unexpected bill or repair cost, time away from work, or the need to make a large purchase are common reasons why people seek to take out loans. A loan is a lump cash sum, available from a lender such as a bank, building society, or a company specialising in finance options. Loans are repaid over a fixed term at a set amount per week or month, and are subject to additional interest rates which build over the loan period.
Traditionally, loans have been reserved for people with income from working - and who have excellent credit histories. However, specialist companies have sprung up which cater to people from all backgrounds, means and circumstances. There are fewer barriers than ever before to accessing finance options. Take us, for example! We specialise in providing loans for people on benefits, including those with bad or no credit histories.
Applying for a loan is quick and easy thanks to our online portal. Simply provide us with information about you and your circumstances, including proof of income. As long as you are able to meet the cost of the loan through your income from benefits, we should be able to help you with the funds you need.
If you receive benefits but need a loan, we have options available for you
Our loan specialists understand that people on benefits are just as capable of managing their monthly budget and assigning their income to their costs as required. We feel that welfare-led income is just as valid when assessing clients for loans, so we take into account a range of different benefits when determining your suitability. Our loans are issued subject to ability to pay them back - regardless of the income source.
In order to obtain one of our specialist loans for people on benefits, you will need to show proof of income. This includes showing your benefits claim decision letters, an up to date benefits book (where applicable), and in many cases, your bank statements for the account into which the benefit is paid. When assessing your suitability for the loan, we can also take into account other income such as wages, and also any savings.
Which benefits are accepted as income for the purposes of a loan application?
Not all benefits can be considered when applying for your loan. We exclude benefits that are specifically intended for a particular purpose - such as Housing Benefit, unemployed people on Jobseekers Allowance and Income Support. Any payments made as Child Support, either through the official channels or as part of an informal agreement, must also be excluded from your overall income.
However, a large number of benefits will be considered as income for the purposes of securing your loan. This includes a range of non-means tested benefits, plus in-work benefits. Tax credits and working tax credits, Disability Living Allowance, Incapacity Benefit and Severe Disability Benefits are all eligible. Income from local authorities that is generated through fostering placements will also count towards any loan assessment.
Wondering how your loan will break down month by month? The example below is based on our standard rates, and should give you an indication of how much your intended borrowing will cost. The rates shown here are for illustrative purposes only. Loans are issued on a case by case basis, according to the applicant's own financial situation. You may find that your interest rate differs from that shown, and your monthly payments will vary according to the amount borrowed and the length of the loan's term.
Our typical interest rate on loans for people on benefits is 93.6% APR.
If you borrow £1,000 at this rate over one year, you would pay back £117.06 each month. The total cost of the loan would be £1,404.72, including interest.
Borrowing the same amount over five years would cost £58.76 per month, for a total of £3,525.60.
Remember, this is just an example. For a full breakdown of your own tailored loan agreement, use our online application form or speak to one of our friendly, helpful advisers. We are here to help you get the right personal loan for your needs, based on your own individual circumstances.
Why is it difficult to get a loan if you are on benefits?
People who claim benefits are often viewed unfavourably by traditional financiers and lenders. People with steady working income are usually preferred by banks, for example. However, benefits income is often just as reliable, and the claimants just as responsible - so lenders like us have made it our business to ensure people just like you have access to finance options.
Claiming benefits and poor credit scores often go hand in hand. Even if you have no factors that negatively affect your credit rating, you may have such a small credit footprint that you score low - and this will exclude you from many loan options. Our loans, on the other hand, include packages tailored to those with bad credit. As long as you have the means to pay back, and you can prove this with valid documentation, we may be able to help you.
Ready to get your finances in order? With a benefits-income loan, you can borrow against the money you already have coming in. Make that big purchase happen, tackle an upcoming bill without worry, or consolidate debt so you can move into financial good health. There are many reasons you might come to us for a loan - whatever yours is, we are here to help you find the best option.
You can get a quote online by completing our application form or calling to speak to an adviser. We can explain exactly how your loan will work, including your annual interest rate, amount available for borrowing, and loan term. All you need to do is provide proof of identification, verify your income, and set the term over which you wish to repay. Make sure you can meet those monthly repayments, including any accrued interest, on an ongoing basis. As long as you fit our borrowing criteria, we can help you get the loan you need quickly and easily. Contact us now!
Just because you receive benefits does not mean that you can not apply for a loan with no guarantor. As some direct lenders will still offer certain amounts of finance to individuals who are currently out of work or claiming benefits.
Which direct lenders offer loans for people on benefits?
The majority of UK direct lenders will offer loans for people on some form of benefits such as divisibility benefits. All direct lenders will look at your ability to repay the loan in full without getting yourself into financial difficulty. The minimum income that direct lenders require will differ from each lender. If you are on short term benefits such as jobseekers allowance, it may be harder to find a lender that is prepared to offer you a loan due to the fact that you do not have a stable income.
Loans for people on benefits should only be taken out as a last resort due to the fact that you do not have a consistent and stable income.
Will I be accepted for a loan on benefits?
It's no secret that applying for a loan on benefits and getting accepted is harder than applying for a loan if you have a stable job and consistent income. With that said, some lenders will still offer loans for people on benefits such as disability as this type of benefit is seen as long term. Although we can never 100% guarantee that your loan will be accepted, we will show your application to lenders that specialise in no credit or bad credit.
Where can i apply for a loan on benefits online?
The best place to apply for a loan is through our online application form, It takes just 5 minutes to complete. Unlike many old school banks and building societies, applying for a loan online is extremely quick and will always give you an instant online decision. The other added benefit of applying for a loan online is that you increase your chances of being accepted by a lender as your application form will get presented to a huge number of lenders.