You need a loan but you have bad credit, you are on benefits and you do not want a guarantor loan. If this sounds like your situation, you might be interested to know that there are loans for bad credit no guarantor on benefits available.
The Types of Benefits Considered By Lenders
Before making a decision to approve a loan, lenders look into the amount of money, you have coming in and what you have going out. If you have enough money left over after you have paid your bills, the lender may approve you a loan if they think you can repay it.
There are certain benefits that lenders take into account and consider a regular income. While these may differ between lenders, generally if you are on the following benefits you may be able to get a loan:
- Family allowance;
- Incapacity benefit;
- Disability working allowance;
- Severe disablement benefit;
- Industrial injuries disablement benefit;
- Working tax credit or Family tax credit.
There are some types of benefits that lenders may not consider income and these may include:
- Income support;
- Pension credit;
- Child support payments;
- Job seekers allowance;
- Housing benefits.
You can learn more about benefits for sickness and disability that lenders may consider income.
Two types of loans for bad credit no guarantor on benefits are more suitable for others if you have bad credit are on benefits and you do not want to have to ask a third party to stand as guarantor. These are payday loans and short-term loans.
Lenders are generally more willing to offer loans to people with poor credit if they are only asking for a small amount of money and they want to repay it in quickly. This is due to the risk being smaller than it would be with someone who wanted to borrow many thousands of pounds and repay the loan over many years.
Both of these loans offer small cash amounts, which are repaid back over the short term. How short the term depends on which of the loans you choose based on how much you need to borrow.
Borrow £100 to £500 For Up to 3 Months
If you need a very small sum of money, from £100 up to £500 and you can afford to repay the loan within three months a payday loan might be the most suitable option for a loan.
Loans of this type are usually taken out to cover an unexpected financial emergency that has cropped up, which you know you could cover the next time you are paid. This could be to pay a bill you had forgotten about, to cover a direct debit you forgot about, repairs to household appliances that have broken down or your car.
Payday loans can be taken out for any reason as the lender generally does not ask why you need the money. The loan can be paid back in one lump sum on the next date you are paid benefits or you could choose to spread it over three months.
Borrow £500 to £5,000 Repay within 12 to 36 Months
Short-term loans usually offer £500 to £1,000 but some lenders may let you borrow up to £5,000. The typical short term loan is repaid in less than 12 months but some lenders may extend it for up to 36 months, generally, this is considered a personal loan.
There are options for loans for bad credit no guarantor on benefits available and we can help to find you a lender willing to offer you a loan. You do have to be over 18, live in the UK, and have a bank account and debit card, to be considered. Apply with us today and you could borrow between £100 and £5,000 with an instant decision and money paid fast into your account.