The regulatory authorities and the whole financial system in the United Kingdom are very accommodative and helpful in taking care of the financial needs of its citizens.
People struggling to earn and meet all regular expenditures like:
- Unemployed people
- Disabled people
- Have children to raise
- Retired people
- Taking care of an ill person
These are under the circumstances in a low monetary situation requiring the dire need for filling up finances in the form of various benefits.
With this source of add-on income, these people fulfill most of their essential and daily needs along with some out of budget necessary expenditures. Sometimes, a substantial financial crisis occurs, when the benefits being availed are not enough to meet the entire investment warranting the requirement for a proper loan.
The loan companies offering funding assistance through traditional ways do not entertain the loan applications of people with benefits.
They perceive such a category of persons under the danger zone, unable to pay off the repayments regularly in the future.
More and more new and emerging online lending companies with a different finance assistance mandate and a heart to understand the situations of British people openly are coming up. It acts as a good source of financial respite for all.
Further, if a person has been on benefits for more than six months, then that person is also eligible for Budgeting loans from the Government.
Even people availing various Governmental benefits need some extra funds to cater to emergency needs and they can make use of no guarantor loans.
Without any mandate to provide any co-signing of a third party assuring the repayment of the whole amount of loan, these online lenders offer highly affordable loan products.
HOW TO GET A LOAN WHILE RECEIVING BENEFITS
Any person in the process of availing any loan while also receiving benefits from the UK Government should first calculate one’s affordability concerning the entire loan amount as well as its timely payments.
A budget for the same having recorded near to figures of income and expenses and the remaining amount left for regular repayments can be a tool measure for deciding a particular loan product.
Then, seeking one’s credit report from the three best credit referring agencies of the UK would be immensely helpful.
Updating this with the latest loan documents and other records can give a clean slated picture to the lending companies.
A credit report and credit score is the device through which the lending institutions gauge the risk profile of the person to predict his/her future repayment behavior.
Thus, maintaining a good credit report is crucial for getting loans.
After this, it comes to the most essential step of comparing various lenders in terms of their loan offerings to get the best deal.
Many brokers or lenders offer different loan products and ascertain, which one would be the best based on time duration and other things a subjective matter.
Therefore, careful consideration in this realm is inevitable to get the best deal, and to assist one can make use of comparison tables.
Lastly, before making the loan application, one should ensure that the lender is an accredited lender having licensed by the FCA of the UK to grant loans.
Otherwise, this would tantamount into a fraudulent transaction.
TYPES OF LOANS FOR PERSONS WITH BENEFITS
The below-mentioned benefits make people eligible availing these benefits for various loans:
- Guarantor loans
- Secured loans
- Collateral
- Credit card
- Small finance loans
- Payday loans
- Vehicle finance plans
- Specialists’ loans
TYPES OF BENEFITS ELIGIBLE FOR LOANS
The below-mentioned benefits make people eligible availing these benefits for various loans:
- Incapacity Benefit
- Disability Living Allowance
- Severe Disablement Benefit
- Disability Working Allowance
- Industrial Injuries Disablement Benefit
- Family allowance
- Family tax credit/working tax credit
- Income from fostering can be used.
- Tax Credits
UNEMPLOYED AND ON BENEFITS
If a person is without any job and living on benefits, generally the myth is that this person will face difficulty in gaining any loan finance.
Nevertheless, this is not all true.
Any unemployed person can get any loan if he or she can make regular repayments from the benefits received from the Government.
Besides, such benefits include disability and other government benefits, payments received from court settlement, a will or trust, and other unconventional income sources.
Ascertaining the affordability of a loan after meeting all the monthly essential expenditures is very important here. Besides, the credit score, which would determine the rate of interest or APR by the lenders.
If a person’s credit history is low and bad, the chances of that person getting a loan with a higher percentage of APR is more apparent, considering the high-risk category he or she is in.
People already availing various benefits can sometimes fall into a debt trap of bad loans or even credit card payments.
Such people find it very difficult to get any finance from conventional banking sources..
The new-age online lenders understanding their situation are emerging with attractive loan options as loans for bad credit no guarantor on benefits.
People having to their records a bad credit history because of defaults in repayments or nil debt situations can avail this smart loan with flexible repayment plans.