Wait! Are you curious whether you can get loans when on benefits? Probably, you can, but such loans depend on the type of benefits you receive.
Not just knowing if you can get loans when on benefits but how to get such loans is the most vital part. That is what I am set to explore here.
What do Benefits Mean in Finance?
Benefits are the sum of money an individual receives under exceptional circumstances.
It is the systematic welfare payments given to individuals for rental assistance, food stamps, or pension.
Living on benefits provides additional income or financial support to people with low income or living in strait-people with no luxurious lifestyle, who are unemployed and seeking jobs.
For an individual to qualify for benefits, he must meet the conditions designated by the government. For instance, to claim pension benefits, you must have retired from work.
Generally, it is the DfC (Department of Communities) that manages most benefits.
Below are its components with the various benefits they provide.
- The Pension Service (part of DfC) also, State Pension and Credit Pension provide pension benefits to retired workers.
- The Jobs and Benefits Services deal with families (raising children) and working age (unemployed but seeking jobs) benefits.
- The Disability and Carers Service deals with the benefits provided to disabled or sick people and those taking care of them.
- Child Maintenance Service provides the benefits for sustaining children.
- The Housing Executives provide Sheltering benefits for individuals with no place to live.
Advantages of Providing Benefits to Individuals
- Crime Reduction: People will do anything to meet their basic needs. For instance, if there is a lack of food and no means to satisfy such a need, fraud would be the following option to accept. But, offering some financial support would reduce the crime rate.
- Assistance: Benefits help individuals meet their emergency needs. It provides services when it is needed the most.
- The Offer is Limited: The provision of benefits to individuals is often fixed depending on your age and the level of your source of income. Thus, making any beneficiary eager to find other meaningful employment to fund his financial life.
Disadvantages of Providing Benefits to Individuals
- It Generates a System Abuse: The aim of being on benefits is to receive help when needed, but some people would go the extra mile, taking advantage of the opportunity, which is generally unacceptable.
- High Rate of Dependency: When many needs of individuals are satisfied all the time, they tend to depend on the government without looking out for something to help earn a living. Thus, creating laziness among individuals.
- The Root of Poverty is not Exposed: Some organizations that provide benefits to individuals do not invent a program that enlightens on poverty alleviation and skill acquisition, thus leaving some of the beneficiaries in poverty with no knowledge of averting it.
How to Get Loans When on Benefits
It is likely possible to get approved for loans when you receive benefits. Even though some lenders or banks may repudiate offering loans to someone on benefits, some loan companies do otherwise as long as you have a steady source of income to repay the loan.
Applying for loans when on benefits is not different from other loan applications.
Below are the directives:
- Visit the loan company website.
- Provide your minimal documentation.
- Submit the form afterward; your loan request will be approved when the lender has assessed the information provided to know whether you can afford to repay.
10 Best Loans for People on Benefits
It is vital to choose the right loan for you and your needs. There are a variety of loans available to help people on benefits, but below are the 10 best out of them that can help you cover your costs.
1. Doorstep Loans
They are home-collected short-term loans funded in cash by an agent and repaid weekly. A payment book is given to the borrower to keep track of the amount he is to reciprocate.
The loan involves a face-to-face discussion with the lender and does not matter if you have no bank account.
2. Budget Loans
It is best for people on benefits because it requires no interest with an extended tenure repayment.
3. Quick Loans
It is a loan for emergency use. As the name indicates, the application and approval are fastened-the loans are funded immediately. So, it is suitable for people on benefits; they can use the loan as fast as possible.
4. Loans for the Unemployed
Though some lenders would require employment proof with a steady income before approving a loan, some do contrarily. Still, they evaluate the information provided by you to consider whether you can afford the repayment.
People living on benefits can apply for such loans provided they are on regular guaranteed benefits.
5. Personal Loans
It is a loan for emergency use that requires no collateral. It is appropriate for people on benefits because they do not have to offer anything in return before approving the loan.
6. Payday Loans
A payday loan is a loan issued the same day it is approved. Its minimum and maximum loan amount are $100 to $5,000, respectively. There is no fee involved, and credit score is considered too.
7. Short-Term Loans
It is the type of loan with a short loan term. It is paid within a short while, depending on the lender.
This type of loan is suitable for people on benefits because they can at least afford to repay.
8. Payday Loan Direct Lenders
It is the loan company that allows an applicant to borrow money from whom you applied directly. The lender can only accept the application based on their credit products.
9. Logbook Loans
It is a type of loan secured against your vehicle, and the maximum loan amount is 50% of the car’s value. The loan company holds the vehicle title until the loan is repaid.
10. Same-day Loans
The loan is funded the same it is ratified and used to settle emergency needs. Thus, it is safe for people on benefits.
Below are the most asked questions about loans when on benefits that you may find beneficial.
Can you get a Loan if you are on Benefits?
Probably, you can. Living on benefits does not interrupt someone from getting loans for emergency use.
What is the Easiest Loan to get Approved for?
The easiest loan to get approved for is the short-term cash solutions for bad credit borrowers in need, such as car title loans, personal installment loans, payday loans, and pawnshop loans.
Can I get a Loan while on Universal Credit?
Yes, you are likely to get a loan while on universal credit to cover some other expenses.
Living on benefits provides financial support to less privileged individuals and does not impede anyone from getting loans.
Some lenders approve loans when on benefits though they ensure you are on regular guaranteed benefits.
Pay attention to the video below for a further description: