Loans on benefits with bad credit are not impossible to find but they are by no means the easiest thing to find. We do make finding the most suitable for your needs easier as we work alongside a huge panel of lenders from the UK who consider all circumstances.
People with poor credit ratings have a hard time finding a loan, even more so if on benefits. Your personal circumstances might have changed from when you earned a poor credit rating but some lenders will not give you a chance.
What you need is a lender who realises that things can change and your past credit history should not stop you from lending now. Luckily, some lenders out there will consider verifiable income along with your credit past.
Finding them is not always easy, by yourself. You have no idea which lenders will consider current circumstances and ability to repay a loan. This is where we can come in. We are not lenders; we are brokers who work alongside a huge panel of lenders in the UK to match them with people looking for loans, who are on benefits and have a poor credit rating.
Most Suitable Types of Loans On Benefits with Bad Credit
There is a wide range of loans out there but some are more suitable to apply for if you have a poor credit rating than others might be.
If your credit rating is poor, it is going to be more difficult to find a large loan than it is a smaller loan. With this in mind the following three are perhaps more suitable for people with bad credit, these are:
- Guarantor loans;
- Short-term loans;
- Payday loans.
Smaller Loans May Be Easier To Obtain
Smaller loans are easier to find approval for than big ones due to the fact lenders see you as being less of a risk. No lender is going to offer someone with a poor credit rating on benefits a loan of many thousands of pounds with the loan spread out over many years.
You do not need anyone standing by your side and you do not need to secure anything against the loan.
Payday and Short-term Loans
With a payday loan, you might be able to borrow between £100 and £500. The interest on the loan is calculated on a daily basis so you should bear this in mind when deciding how you want to repay the loan.
Payday loans can be repaid in full on your next payday or you can spread the cost of the loan for up to three paydays. This makes it a one to three month loan if you are paid each month.
The short-term loan may allow you to borrow up to £1,000. With this loan, you can generally spread out the repayments for up to 12 months.
Is A Guarantor Loan Suitable For You?
If you want to borrow up to £5,000 and are paid regular benefits that lenders class as an income (more about benefits that may be classed as an income) and have a poor credit rating you might have to consider a guarantor loan.
The loan requires you to find a close friend or relative to stand by your side as the guarantor that the loan will be paid. If you cannot meet the loan repayments, your guarantor takes them over.
If you would rather not ask someone to stand as your guarantor or you need to borrow a smaller sum of money, you could consider a payday or short-term loan.
What Types of Benefits Are Classed As An Income?
One of the requirements for applying for loans on benefits with bad credit in the UK is that you have a regular income. While this includes an income from any work you do, lenders will also consider certain types of benefits providing they are paid on a regular basis.
Not all types of benefit are classed as an income. Benefits that lenders will typically class as a regular income include:
- Disability living allowance;
- Disability working allowance;
- Incapacity benefit;
- Severe disablement benefit;
- Industrial injuries benefit;
- Family allowance;
- Family tax credit.
Along with having a regular income other criteria includes being over the age of 18, living in the UK and having a bank account with debit card attached.
Apply Online For Loans with Bad Credit
There are lenders on the high street but they will almost certainly turn down an application for credit made by people with a poor credit rating.
An easier, not to mention quicker solution is to apply for loans online. While you can search yourself for loans, there is an even quicker way to search with a range of lenders and this is by allowing us to search with the panel of lender we work alongside.
The lenders we work with offer some of the most competitive rates of interest along with affordable loan solutions. By allowing us to match you with a lender, you only have to make one loan application but still gain access to a panel of lenders. If you were to search on your own with multiple lenders all the applications would be noted on your credit file and go against you.
To start your loan application all you have to do is tell us how much you want to borrow, the length of the loan, some personal details, including details of the benefits you receive each month.
We will be able to give you an instant decision and you can then check out the details of any loan you are interested in with the lender and go-ahead and sign up for the loan.
Depending on the lender, and how much you want to borrow, the funds from the loan could be paid into the bank on the same day and sometimes within hours.
Apply for loans on benefits with bad credit rating with the lenders we work alongside and you get an instant decision.
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