Can getting loans on benefits secure your future?
Do you believe that getting loans is difficult when you live on benefits? Days have changed now with wider opportunities waiting for you. There is no point in thinking you do not deserve a chance to borrow because you have a disability or are unemployed.
Lenders are now more empathetic towards people who are dependent on benefits. They accept this financial assistance as a stable source of earnings. Therefore, you have the liberty to show benefits as an alternate income.
You should not hesitate if you live on benefits and need a loan today from a direct lender. It is because additional financial support is accessible to you. The loan provider has created this opportunity keeping your necessities and limitations in mind.
Here, they are ready to offer help if you can establish another income source. It will make sure that loan payments will happen on time. Instead of rejecting your application by considering you receive benefits, the loan provider is now willing to give you a second chance.
If you work with these loans cautiously, you will not have to repent later. Dig through this blog to understand if this financing option will be a blessing for your future.
Key points to focus on while getting loans on benefits
It is frustrating when you have to let go of loans because of your disability or unemployed status. Do not blame yourself, as lenders have rigid criteria! It does not mean all doors are closed for you.
Getting loans is a viable way to handle any financial problem despite living on benefits. It is just that you do not need a regular income source to show lenders. On the other hand, you have benefits and other side income to convince the lender.
Go ahead with your idea of borrowing without feeling reluctant because of your dependency on benefits. These loans have a lot of features to surprise you.
The extent you can borrow
You might wonder if the lender would ask you for some adjustments. Do not worry, as it is not going to happen! It is because these loans let you borrow according to your necessities.
Here, you can apply for a 1000-pound loan to cover moderate requirements. Moreover, borrowing according to your capacity is the best. This way, there is nothing to worry too much about repayment.
Preference for an affordable amount will work in your favour. The lender considers lending money within a safe limit that confirms successful repayment before the tenure ends.
Go through the additional need that has popped up to calculate the amount you must borrow. Next, validate if the amount is convenient for you to pay back within the given duration. Proceed further once you get the answer.
The merits and demerits of these loans
Loans are, after all, debts that thus come with their fair share of benefits and setbacks. As a borrower, you cannot overlook this aspect. Assess the pros and cons of thinking rationally.
Pros of loans for people on benefits
The advantages can show how your financial position can improve by applying for these loans.
Flexible borrowing limit – You have no compulsion to follow strict guidelines while selecting the loan amount. Pick up any amount within the range mentioned for you.
Competitive rate of interest – The lender does not decide to charge heavy rates despite your inconsistent income. They take an overall assessment of your financial condition to fix the interest rate.
Practical repayment plan – It does not matter even if you have applied for a 2000-pound amount of loan. The repayment tenure will spread over months. Feel free to break down the cost and repay conveniently.
Feasibility to apply from anywhere – You can sit inside a café and pay its bills by sending out an online request and getting money right away. Therefore, you do not have to take a lot of stress after forgetting the wallet at home. These loans need an online application for disbursal.
Requirements are brief – The lending criteria are not elaborate like that of banks and other financial institutions. In most cases, collateral and guarantor are not necessary even when the credit scores are not convincing.
Cons of loans for people on benefits
These loans have all the reasons to become your perfect financial partner. However, your careless attitude while handling loans can make you pay a heavy price.
Penalties for late payments – If you feel repaying on time is difficult, talk to the lender immediately. Otherwise, you will have the bear the burden of penalties.
A further blemish on credit – Late or missed payments will tarnish your credit history. Not to forget that your credit report will record these activities.
Ruin future opportunities – A history of pending payments and a blot on your credit history is enough to make you ineligible in the eyes of other lenders.
Alternatives to loans of benefits
If you feel getting loans is not a suitable decision, you can check out the other borrowing options. It is always a better idea to choose other alternatives if loans cannot help you in your situation.
The other options you can explore are:
Assistance from the government: Search for various government-sponsored programs to empower borrowers like you financially. They are flexible in terms of conditions. Make sure that your problems can solve with this type of support.
Help from family or friends: Your relatives and friends are your closest, and you must approach them at least once. You never know how they can come up with the best solution for your situation.
The bottom line
Any tricky financial spot can make your life more stressful, mainly when you depend on benefits to meet expenses. You will find no way out if you consider it as your limitation.
Different types of loan facilities are available. If you do not look for assistance while stuck in this situation, you can never come to know about these loans. You must have got a complete understanding of the ways these loans can be helpful for you. Complete and submit the application if you are convinced.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.