If you are currently receiving benefits, the answer is yes: you can be authorized for a loan. The good news is that a number of lenders are ready to regard certain benefits as a sort of regular income in specific scenarios. The bad news is that these scenarios are rare. This indicates that a significant percentage of people receiving benefit payments may, in reality, be qualified for a loan based on a variety of other factors about their specific circumstances.
How Can You Apply For A Loan On Benefits?
The steps involved in applying for loans for people on benefits are less diverse for people who receive money from a normal job than those who receive income from government benefits. The procedure could be speedy, uncomplicated, and stress-free, even though you could be required to offer more information about the benefits you receive in addition to your complete monthly income and typical expenditures.
You won't have to worry about a credit check being performed since our eligibility checker is quick and easy to use. It will give you an immediate idea of your possibilities of getting accepted for a loan. After that, you can move through with our short and easy application form, which does what is known as a "soft search" of your credit file in order to assist us in locating the financial institution that is most likely to provide you with a loan.
If you want to go forward with the direct lender we have found for you, they will carry out a comprehensive credit check, which may affect the score assigned to your credit report. If you are granted a loan, the funds might be deposited into your account in minutes.
Which Benefits Count Towards My Income?
As was previously indicated, the sorts of loans open to you may be affected by the advantages you get. Lenders may accept the following perks as acceptable sources of income as a starting point; however, approval for loan ultimately depends on a thorough examination of your individual situation.
- Personal Independence Payment
- Incapacity Benefit
- Child Tax Credit
- Child Benefit
- Working Tax Credit
- Fostering Allowance
- Employment and Support Allowance
- Industrial Injuries Disablement Benefit
- Disability Living Allowance
Which Benefits Don't Count Towards My Income?
There are, however, other benefits that lenders are less likely to take into consideration when considering whether or not your monthly income satisfies their requirements. These advantages include: While the specifics of this may vary from one lender to the next, some benefits that are often not covered include as follows:
- Housing Benefit
- Income Support
- Job Seekers' Allowance
- Pension Credits
You must receive a qualified income and any above benefits to be accepted for a loan. However, receiving any of these benefits does not automatically prohibit you from being authorized for loans for disabled people on benefits.
Can You Get A Loan On Disability Living Allowance?
Anyone over 16 will be eligible to receive PIP, which will take the place of DLA. People with long-term illnesses or disabilities are eligible for PIP, and the amount of money you get each week is determined by the severity of your disease and how it affects you. Lenders consider benefits like Personal Independence Payments to be consistent forms of income, which means that many people who get these payments may be qualified for loans.
Alternative Options
Benefit recipients should think long and hard about whether or not a short-term loan is the best solution to their immediate financial needs. Although some payday loan companies advertise that they work with persons receiving government assistance, anybody looking into getting a payday loan should carefully evaluate the financial consequences of doing so and explore all available alternatives. Further, prospective borrowers must consider how a loan can affect their credit rating.
You might also apply for a Government Budgeting Loan as an option. Beneficiaries would be eligible for a budgeting loan made accessible for at least half a year. If your application is successful, the money will be made available as an interest-free credit that you may use to buy things for your home, pay your rent, or cover any other necessary expenses.
Budgeting Advances are still another viable option to consider. People who receive Universal Credit are eligible to apply for these, which may be used to pay unforeseen one-time expenditures. The repayments would be processed mechanically, and their funds would be deducted from the next Universal Credit installments.
