Is It Possible to Borrow Money While on Benefits?
Yes, it is possible to borrow money while on benefits, but of course, conditions often apply. All lenders have the stipulation that a borrower must be able to repay their loan, and as a part of the application process, you will be required to demonstrate your ability to repay. Lenders have a minimum income requirement that may differ from lender to lender and depends on how much is being borrowed.
If you are on benefits, and need a loan today, direct lenders from our list would be happy to hear from you. You can find a number of available loans for people on benefits depending on what types of benefits you are receiving. If you are receiving a Disability Living Allowance, you will be considered for a loan, since this type of benefit is a permanent one.
If you are on benefits and need help securing a loan, we may be able to help you. Some of our featured lenders make instant decisions and send money out on the same day, sometimes even within 60 minutes of approval.
Are Guarantors Needed to Be Approved for a Benefits Loan?
Guarantors are not needed for loan approval in all cases. Some lenders require loan applicants to have a guarantor if the applicant is receiving benefits. This requirement is also dependent on the type of benefit you are receiving as the loan applicant. When you do your loan application through us, we send that one application to multiple lenders.
There are a number of lenders that offer loans on benefits without a guarantor, as guarantor loans tend to be for applicants that have struggled in the past with bad credit. You will not be eligible for loans on benefits with bad credit if that bad credit is current though.
The lenders we work with at FastPaydayLoans are more interested in your current financial status and your ability to repay, not what was happening in your past. So your chances of getting approved without a guarantor are high if you don’t have anything interfering with your ability to repay the loan you are applying for.
|Why Trust FastPaydayLoans?|
|How much can I take out?||£100-£5000||No obligation quotes|
|Representative APR||49.7%(variable)||Competitive rates|
|Will bad credit be accepted?||Yes||Lenient requirements|
|What are the repayment periods?||1-36 months||Flexible loan term options|
|How can I apply?||Apply online||24/7 available|
How to Apply for a Loan on Benefits?
You start by completing your loan application and submitting this to a lender. The lender will evaluate you, looking at your current income, your credit score, your employment history, and what you plan on doing with the loaned money, along with other information they may deem relevant based on your situation. Their decision to approve or deny will be based on their evaluation.
Being employed at the time of applying for your loan on benefits can tip the scales in favor of you receiving the money. Companies prefer to hand out smaller loans, as this minimizes their risk, and you will be able to repay the loan faster if the amount loaned is smaller.
The type of benefit you are on can also determine what type of loan you can apply for or what may be approved for you. It's best to apply through a broker that can send your application out to multiple lenders, increasing your chances of getting a loan. This removes the work for you and removes some of the work for the lender as well.
Which Benefits Count Towards My Income?
As we noted above, the benefits you receive can have some influence over the types of loans for benefits that you qualify for. Your benefits can also have influence on the types of loans you qualify for. Here are some benefits that lenders see as an eligible source of income, and so can work in favor of your application. The benefits that will work in your favor include:
- Child Benefit
- Child Tax Credit
- Disability Living Allowance
- Employment and Support Allowance
- Fostering Allowance
- Incapacity Benefit
- Industrial Injuries Disablement Benefit
- Personal Independence Payment
- Working Tax Credit
Are you receiving any of the above benefits? If your answer is yes, you may stand a better chance of being processed for a loan from one of our direct lenders.
Which Benefits Don't Count Towards My Income?
Though you can qualify for a loan while on benefits, not all types of benefits can be considered a plus when applying for a loan. Just as there are benefits that lenders are more likely to consider favorably, there are those that will not count towards your income. While the benefits included here may not be treated in the same light by all lenders, these are the most commonly excluded benefits:
- Housing Benefit
- Income Support Benefit
- Job Seekers Allowance
- Pension Credits
The above benefits will not disqualify you from loan approval, but they may make it a bit harder for you to qualify for a loan. It only becomes difficult if you do not have a form of qualifying income in addition to the benefits.
Alternatives to Loans for People on Benefits
Even if you are in financial need, a short-term loan is not the right choice for everyone, and applying for additional finance may not be the smart thing to do in your circumstances. While there are many payday loan offers on the internet, for many of us, alternative forms of financial aid are a better option. If you are on benefits, you don’t have to take out a loan. There are alternatives that you may qualify for.
Did you know that you have the option of applying for a budgeting loan from the government? If you have been receiving benefits for more than 6 months, you could be eligible for one of these loans. If you qualify, you will receive an interest free credit that you can put towards rent, household goods and other essential financial needs. Learn more about getting Government Budgeting Loans on benefits to see if you qualify.
If you are a recipient of Universal Credit, you can also look into Budgeting Advances. A budgeting advance can give you money to deal with unexpected one-time costs. Repayments for a budgeting advance are taken directly from any future Universal Credit installments. You can find out more about Budgeting Advances and determine if you qualify as well.