There are many people who need financial assistance but do not have access to traditional forms of credit. Loans for people on benefits exist to help fill this gap, and they can be a great way to get the cash you need without having to worry about your credit score. In this article, we'll discuss how payday loans for people on benefits work and how you can apply for one. We'll also highlight the pros and cons of using this type of loan so that you can make an informed decision about whether it's right for you.
About Loans For People On Benefits
Navigating the financial aspect of your life can prove to be a difficult task. Whether it’s general expenses that weigh on your savings or more urgent matters such as an unexpected bill, almost everyone will face a time when money becomes a concern.
There is no shame in seeking out assistance, however many are led to believe that their special circumstances render them ineligible for the help they need. This rings especially true for Payday Loans For People On Benefits, as benefits from the government can complicate the process of assessing whether an applicant will be cleared for a loan.
Things To Consider: Budgeting Loans And Advances
Before you take the first steps in applying for a loan, it would be prudent to take stock of your circumstances first. If you require emergency relief and have been on certain benefits for the past six months, you may be entitled to a BUDGETING LOAN or BUDGETING ADVANCE from the government. These are interest-free, meaning that you only have to pay back exactly how much you owe.
You can use budgeting loans for rent, household items, moving costs, and various other expenses. If you receive Universal Credit, budgeting advances are available as urgent financial relief for essential needs like rent or food. You can read more about them, as well as check if you’re eligible, on the official Government Website linked above.
Things To Consider: Debt Advice
If you still wish to take out a loan, it’s important to be educated on the impact debt could have on your life moving forward. Although this page aims to be helpful to you as possible, we completely understand if you want to conduct further reading on these important decisions. A great place to start is the debt and money section Citizens Advice has been compiled with useful information.
There are plenty of resources out there for those seeking benefits loans. You can use the knowledge gleaned to form a plan on how to pay off your debt plus the incurring interest. Those of low or limited income need to know exactly what they’re getting into. A poorly thought-out loan could land you in a financial situation worse than where you began.
You may not even be taking advantage of some benefits that you’re entitled to, as people’s situations can change in subtle ways, or the requirements to be eligible may change. So make sure that you utilize a benefits checker to see what you could be missing.
Applying For A Loan On Benefits
It’s possible to apply for and be granted a loan while receiving benefits. When a lender evaluates a potential borrower, a whole host of factors come into play that could influence their decision. Besides the obvious things like credit score, they may also look at your current income, employment history, what you plan to do with the money, and anything else they deem relevant to their decision. So be prepared to present them with what they ask for if you can.
- A lender’s top concern is ensuring their applicants can pay back the loan they took out. That’s why loans for unemployed people on benefits can be tricky to obtain, seeing as they don’t have a set path to pay it all back.
- You can tip the scales in your favour by being employed when applying for the loan, as you’re more likely to be able to make the necessary payments on time. A general guideline is they prefer handing out smaller loans as it minimizes their risk, and they will want it paid back as fast as possible.
- But say you’re unemployed, and currently receiving benefits from the government. It is still possible to successfully take out a loan, but your options could be limited as compared to having the benefits and employment.
- Other types of loans like payday loans for people on benefits will be less common, as those often require paystubs from your occupation or employer. You may even be able to negotiate a lower interest rate if you are clear about your current situation, This can also help with the lenders offering you a competitive APR that’s manageable for your finances.
How Can I Apply ForPayday Loans For People On Benefits?
If you receive benefits, the process of applying for Payday Loans For People On Benefitsis not much different than for people who receive income from regular employment. Whilst you may have to provide some additional details relating to the kinds of benefits you receive along with your total monthly income and usual expenditure, the process can be quick, simple and stress-free.
As a reputable credit broker authorised and regulated by the Financial Conduct Authority (FCA), and added on the financial services register, we are direct lenders who consider applicants from a broad range of backgrounds – including those who receive benefits.
You can continue with our quick and simple application form, which performs only a ‘soft’ search of your credit file to help us identify the lender that is most likely to grant you a loan.
If you wish to complete your application with a direct lender, they will conduct a full credit check which may affect your credit score. If you are approved for a loan, the money may be paid into your account in just minutes.
Are you finding it difficult to make ends meet? Are you concerned about how you will be able to afford important expenses like rent and food? If so, you may be consideringloans for people on benefits. Thankfully, there are a number of loan options available, and follow our guide for the best choice.