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Loans for People on Benefits

Loans for people on benefits are designed for individuals who receive government assistance as their primary source of income. These loans provide access to funds for emergencies or essential expenses, even if traditional borrowing options are unavailable due to limited or irregular income.

How much would you like to borrow?
Representative 79.9% APR Rates from 12.9% APR to 1721% APR. The minimum Loan Term is 1 month. The maximum Loan Term is 36 months. Representative Example: £1,000 borrowed for 18 months. Repayment of 17 Months at £87.22 and final repayment of £87.70 The total amount repayable is £1570.44. Interest amounts to £570.44, an annual interest rate of 59.97%.

What Are Loans for People on Benefits?

These loans are tailored to support individuals receiving benefits such as Universal Credit, Disability Living Allowance (DLA), or other government payments. Lenders assess affordability rather than employment status, ensuring that repayments can be managed alongside existing benefit income.

How Do They Work?

  1. Application: Borrowers provide details about their benefit income, expenses, and financial situation.
  2. Assessment: Lenders evaluate affordability to ensure repayments are manageable.
  3. Approval: If approved, funds are transferred directly to the borrower’s bank account, often on the same day.
  4. Repayment: Loans are typically repaid in instalments over a short period, with amounts tailored to your budget.

Benefits of Loans for People on Benefits

Accessibility

Designed specifically for those with limited income, these loans make borrowing possible for individuals receiving benefits.

Flexible Loan Amounts

Loan amounts usually range from £100 to £1,000, catering to small, urgent financial needs.

Quick Processing

Online applications and fast approval processes ensure that funds are available promptly, often within hours of approval.

Affordability Focus

Lenders consider your ability to repay the loan, ensuring it is manageable alongside your benefits.

Things to Consider

Higher Interest Rates

Loans for people on benefits may have higher interest rates due to the perceived risk to lenders. Always review the total repayment amount to ensure affordability.

Responsible Borrowing

Only borrow what you need and can repay comfortably to avoid financial strain.

Alternatives to Loans for People on Benefits

If you are concerned about borrowing, consider these options:

  • Budgeting Loans: Interest-free loans from the UK government for specific needs.
  • Credit Union Loans: Community-based loans with fair interest rates.
  • Local Assistance Schemes: Grants or support provided by local councils for emergencies.

Frequently Asked Questions

Can I get a loan if my only income is benefits?

Yes, some lenders specialise in loans for individuals whose income comes solely from benefits.

How much can I borrow?

Loan amounts typically range from £100 to £1,000, depending on your affordability and the lender’s terms.

Will a credit check be required?

Most lenders perform a credit check, but some focus on affordability and may approve loans even with poor credit.

Are loans for people on benefits regulated?

Yes, reputable lenders in the UK must be authorised by the Financial Conduct Authority (FCA), ensuring they follow strict rules to protect borrowers.