Yes, you can get a loan while receiving benefits, though it might be a bit more challenging. Your chances will depend on the type of benefits you’re receiving and any other income you have. Lenders look at these factors to make sure you can comfortably manage loan repayments. Rest assured, there are options available to help you through this process!
Should You Get a Loan While on Benefits?
Receiving benefits shouldn’t keep you from applying for a loan. If you need funds and can manage the repayments with your income while still covering your other priorities like bills and childcare, there’s no reason not to go ahead.
You can easily compare loans and estimate how likely you would be accepted for one as well as estimate the interest rate to help you see if it is manageable for your circumstances. Just use our loan calculator online.
What Are the Eligibility Criteria for a Benefits Loan?
The same rules apply when applying for any loan, even while receiving benefits. To be approved you must:
- Be 18 or over
- A UK resident
- Receiving regular income
- Not bankrupt or insolvent
- Able to access a bank account
- Able to give details of an email address and mobile phone number
Normally, a check looks at your employment income, but in this case, the lender will consider the total benefits you receive to see if you can comfortably manage the repayments. Meeting all of these criteria doesn’t mean you’ll be accepted for a loan while on benefits as your credit rating also plays a part I the lender’s decision.
What Benefits Count as Income?
As mentioned earlier, whether you’re selected for a short-term loan is dependent on your circumstances. The type of benefit you receive can be an important consideration. These state benefits are often accepted as income when applying for a benefits loan:
- Universal Credit
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Working Tax credit
- Child Benefit
- Fostering Allowance
- Child Tax credit
- Employment and Support Allowance (ESA)
- Incapacity Benefit
Which Benefits Don’t Count Towards My Income?
Some lenders might not consider giving you a loan if your benefits aren’t classified as income. The benefits that are commonly excluded include:
- Job Seekers’ Allowance
- Income Support
- Housing Benefit
- Pension Credits
Managing Your Finances with a Loan and Benefits
Balancing your finances while repaying a loan on benefits can feel challenging, but with some careful management, it’s entirely possible. Here’s how:
- Create a simple budget
- Cut unnecessary spending
- Seek support from a financial advisor
Check out smart cuts to reduce your expenses for more tips on saving your pennies.
What to Do If Your Benefit Payments Are Late
If your benefit payments are delayed, there are a few options you can consider. First, double-check the scheduled payment date—to see how late your payment is. Also, review your account information to ensure that your bank details are current, as outdated information can cause payment issues.
In cases where the payment isn’t due soon and you’re facing a financial crisis, applying for a Universal Credit advance could help tide you over.
What Are Your Options for Unexpected Expenses?
Life is full of unexpected events that we can’t always prepare for. Has your car broken down? Or does the boiler need repairing as soon as possible? Well, there are a few options to consider helping fix your situation.
- Consider a credit card
- Set up a payment plan to void paying in bulk one go
- Ask friends and family for support
- Apply for an interest-free overdraft
- Check out the latest budget loans from the government
- Consider an emergency loan
For more tips on dealing with life’s challenges, check out these useful ways to tackle the unexpected.
How Can I Get a Loan on Benefits?
After you’ve done your research and decided that a loan is best for your situation, you can see what loans are available. Consider how much you want to borrow, monthly repayments and the interest rates. To do this, simply submit your details online.
Understanding the ins and outs of getting a loan while on benefits can open doors to new opportunities. If you’ve reviewed the information and feel prepared, take the next step by exploring available loan options that fit your needs. For more personalised advice or to get started, view our loan guides or our Good Vibes blog for budget & money saving tips.
