With the cost of living continuing to rise, many people are worrying about how they’re going to cope. Whilst some are cutting back on life’s luxuries, others are limiting the amount of time they have their heating on each day, with some in desperate need of greater support in order to pay their bills. With that in mind, the number of people searching for a loan has dramatically increased, with figures expected to soar throughout 2023. All of this poses one important question; can you get a loan when on benefits, and if so, how?
To put it simply, it’s still possible to receive a loan when on benefits, but there may be additional steps needed as part of your application for it to be successful. Below, we explain more about the types of loans for people on benefits.
Loans For People On Benefits
There are many reasons why you may require a loan at any time throughout the year. Some reasons for needing a loan may be able easily controlled, whilst others may be more unexpected. Importantly, it’s a good idea to map out exactly why you need a loan and how it’s going to be used, especially if you are on a benefits income. By doing so, you can ensure you borrow only the amount needed without reapplying for a further loan down the line, ultimately keeping your finances in better check. This will also ensure you don’t run into too much (if any) debt, helping to make sure you can pay your loan back as agreed and on time.
Things To Know: Loans On Benefits
Regardless of whether or not you are on benefits, there are a few things to consider before applying for a loan. Firstly, you’ll want to check your credit score and history. A good credit score and credit history will showcase to lenders that you are able to repay the credit you owe on time. So, the higher your score, the more likely you are to secure a loan.
Loans for people on benefits work slightly differently and, instead of your income, you’ll want to be aware of the type of benefits you receive and how they may affect your application. For example, some lenders will only accept applications from people who claim long-term benefits.
Disability Living Allowance, Employment and Support Allowance, Working Tax Credit, Child Benefit, Child Tax Benefit, Fostering Allowance, Incapacity Benefit, and Industrial Injuries Disablement Benefit are all considered standard forms of income and may be accepted as part of your loan application. Housing Benefits, Pension Credits, Income Support and Job Seekers’ Allowance on the other hand aren’t always considered a standard form of income, though the rules surrounding these will differ from place to place.
Eligibility Criteria For Loans For People On Benefits
There are of course some standard eligibility criteria you need to meet regardless of if you’re applying for a loan on benefits. In addition to being at least 18 years old, you must also be a UK resident and have a UK bank account. If you don’t meet those three points, your application may not be successful or otherwise more complex to fulfil.
If you’re on benefits and need a loan and are unsure whether your application will be accepted, the good news is that you are likely to have just as good of a chance of receiving your loan as the next person. Even on Universal Credit, you still may be able to get a loan. The key difference may come down to the options you have available, which may be more limited compared to if you were employed and received a higher salary.
Even if you have a low credit score, you may still be able to secure your loan in times of need. At QuidMarket, we do not offer loans to customers on benefits. However, if you are in employment we do offer short term loans in a fuss-free way to ensure you receive the funds you need. Whilst some lenders utilise an automated process, each application we receive is reviewed by a real human being
So, even if your bad credit loan application has been declined elsewhere, we still may be able to help you. It’s quick and easy to apply and you won’t need a guarantor on your application, either. You will need to be in employment and at least 23 years old to be eligible at QuidMarket, so this will need to be considered before applying.
Do I Need A Guarantor?
Under some circumstances, your loan application may require a guarantor if you are on benefits and need a loan. This is particularly true if you have previously struggled with bad credit. Guarantor loans are a form of unsecured credit so, instead of requesting collateral, you will need another individual to co-sign the loan agreement with you.
If you’re unable to pay back the repayments as outlined on the agreement, your selected guarantor will become liable. Because of this, you’ll both need to provide personal and financial information during the application stage and will be subject to checks with both Fraud Prevention Agencies and Credit Reference Agencies (CRAs), possibly prolonging the length of time between the submission of your application and receiving your loan.
Applying For A Loan On Benefits
Although we cannot help customers who are on benefits, here at QuidMarket, we offer short term loans that can help out when the unexpected takes place.
As an authorised, responsible lender, you can trust us. Read more about the types of small loans we offer online today and click apply now to start an application.
If you feel you are struggling and need help with your finances, please visit Money Helper.