Anyone who has bad credit may have found obtaining a loan in the past extremely difficult. What about if you have bad credit and you are on benefits? What if you do not want to ask a guarantor to stand by you? You might believe that it is impossible. However, it isn’t and you can apply for loans for bad credit no guarantor on benefits with our help.
Don’t Lenders Check to See If I Have An Income?
All of the lenders we work with ask that you have a regular income coming in. However, this does not specifically mean an income from a job. An income means any money coming into the household on a regular basis. If you have benefits paid into your bank account on a regular basis, this is regarded as an income coming in.
Along with wanting to know about a regular income, the lender will also want to know how much you pay out each month. When applying for a loan on benefits when you are asked about your income this is where you tell us how much in benefits you receive each month.
Our lenders are responsible lenders and will always take your income and outgoings into account. While you might have a less than stellar credit rating, this does not mean you will be rejected. However, it may affect the type of loan you are offered and the rate of interest. The lenders we work with consider what you have coming in each month more than your past credit rating. This means that anyone can apply for a loan with our help.
What Types of Benefit Are Classed As Income?
While the types of benefit that lenders class as an income may vary, the benefits that be classed as an income might include:
- Incapacity Benefit;
- Disability working allowance;
- Industrial injuries disablement benefit;
- Disability living allowance;
- Severe disablement benefit;
- Family allowance;
- Income from fostering;
- Family tax credit;
- Tax credit.
If you are on any of these benefits and you wish to apply for a loan you may be considered.
Will I Have to Pay a High Rate of Interest for Loans for Bad Credit No Guarantor On Benefits
There are many factors taken into account that goes towards determining the rate of interest you pay for the loan.
Factors that go towards determining the rate of interest include:
- Your actual credit rating;
- How much you want to borrow;
- How long you are taking the loan over;
- The type of loan you apply for.
Generally, the poorer your credit rating the higher the rate of interest as the lender sees you as a bigger risk. This may not apply if you are taking out a guarantor loan but will apply to short term loans and personal loans.
The larger the sum of money you borrow, the higher the rate of interest you will typically pay.
The longer you take the loan over the more interest you pay but the cheaper the monthly repayments generally are.
The APR is also going to depend on the type of loan you want. For instance, the payday loan generally has the highest rate of interest. This should be thought of as more of an emergency loan and should only be used if you need money fast and can repay in a month or so.
Which Type of Loan Is Most Suitable?
The type of loan you might wish to take out is going to depend on the amount borrowed and the term.
If you want to get your hands on cash in an emergency and only want to borrow a small sum, up to £1,000, you might apply for a payday or short term loan. The difference between the two is that a payday loan is repaid on the next payday. The short term loan can be repaid back within a longer period, several months, and you can borrow more. Neither loan is taken out over several years.
Anyone with a poor credit rating on benefits can apply for either of these two loans. Another type of loan you might want to consider is a personal loan. You may be able to apply for this loan and borrow up to £5,000 and repay it back over 36 months. The loans offered will depend on the lender, and whether they believe you have the ability to repay the loan.
Your Loan Application Made Easy
We can help you find the most suitable loan for your needs. We work with numerous lenders offering loan options for those on benefits who can afford to repay a loan regardless of their credit rating.
The lenders we work with offer competitive rates based on circumstances. To apply for a loan you need to:
- Prove you have a regular income, your benefit;
- You are over the age of 18;
- You have a bank account and debit card. You will repay the loan through direct debit.
Bonsai Finance may be able to help you find a loan even though you have bad credit and you are on benefits. The lenders we work with offer affordable loans and do pay too much heed to the state of your credit rating. As long as you have a regular income coming in (your benefit) you will be considered.
We work by taking your details then matching you with the extensive list of lenders we work with to find a lender for you. With payday, short term loans or personal loans you do not need someone to stand as guarantor for you to get a loan.
Get in touch with us and search for loans for bad credit no guarantor on benefits and you could get approval in minutes.