Can I Take Out a Payday Loan If I Am on Benefits?
Almost all of us need a loan at some point. However, if you are in receipt of benefits applying for a traditional loan with a bank or building society may not be possible. Many of the traditional lending streams are unavailable to those who are on benefits. Yet, some alternative lenders are often willing to consider applications from those who receive benefits.
If you are in receipt of certain benefits and can show that repaying your loan is affordable, there are a range of payday lenders which may consider your application.
Which Loans Are Available to Those on Benefits?
If you have been refused a loan from a traditional lender, our panel of payday lenders may be able to help. Being on benefits should not mean that you need to struggle through a financial emergency, as some lenders can help.
Many financial situations can result in a person’s income being supplemented by benefits or even their entire income derived from benefit payments. Our panel of lenders analyse your application to see whether repaying the loan is affordable. So, if you receive a long-term stable benefit, you will have a higher chance of approval.
Which Benefit Payments Are Eligible for Loans?
Every lender will differ in the type of benefit payments they will be willing to consider as income for a loan. However, in general, every lender will only consider applications from UK residents aged over 18 with a UK bank account.
Those who receive long term benefits are more likely to be approved, such as Incapacity Benefit, Universal Credit and Disability Living Allowance, where the benefit only forms part of the applicant’s income. On the other hand, those who receive short-term benefits which make up the full applicant’s income, such as Income Support and Child Support, may struggle to find a loan.
Every lender will closely analyse your ability to repay your loan, so the higher the loan amount you need, the higher your income will need to be. So if you are only looking to borrow a small amount to cover an emergency, which you can show will be easily repaid; you are more likely to be approved.
How Do I Apply for a Loan on Benefits?
If you are looking to apply for a payday loan while on benefits, you will need to have your financial and personal information to hand. As a broker, we can speed up the process and help you find lenders who are willing to consider your application. Our simple application form is designed to capture the important information quickly, so it can help have this information available.
Instead of making multiple applications to various lenders in the hope of finding the emergency cash you need, we can match you to the lenders who are most likely to approve your loan. First, we send your details to the potential lenders, who will then assess your application for suitability, then; if you are eligible, you will be redirected to their website.
There is no obligation to proceed with a loan at any point, and if you change your mind, you are free to cancel your application. In addition, using our service is completely free of charge. The lender pays us if you decide to take out a loan.
Can I Get a Payday Loan If I Have a Poor Credit History?
We have partnered with lenders willing to consider applications from those who do not have a perfect credit history. Unlike banks and building societies, our panel of payday lenders will assess factors other than your credit score when processing your application. If you can show that you have been managing your finances well and can repay the loan, you may be approved even though you have a poor credit history.
All the lenders on our panel are regulated by the Financial Conduct Authority, which means they need to follow strict rules to ensure all loans are provided responsibly. As part of these regulations, every lender will conduct a hard credit check when submitting your details to your final chosen lender.
This hard credit check will leave a mark on your credit report, which is viewable to anyone who checks your file. If you make multiple applications in a short period of time, there will be multiple hard credit checks recorded. This could indicate to lenders that you cannot manage your finances well whilst on benefits, so your chances of being approved will reduce. Instead, we always recommend using the services of a broker so that only a single application is made to the lender who is most likely to approve your loan.
How Much Can I Borrow?
Our lenders can offer loans from as little as £100 up to a maximum of £5,000, with flexible repayments terms available. So, whether you need to fix an emergency car repair or purchase a new car, our lenders can help. Instead of repaying your loan the next month, our loans allow more flexibility, with repayments spread across terms of up to 36 months.
It is worth bearing in mind that the quicker you repay the loan, the less interest you will pay. However, a longer loan term will reduce your monthly repayments and make the loan more affordable on your benefit income.
Why Choose Cobra Payday Loans?
Our aim at Cobra Payday Loans is to provide a quick and efficient service to those who need access to funds in an emergency. We know that there are times when an emergency puts a strain on finances, so our lenders are here to help. However, if you find that your finances are often stretched and cash runs low before payday, a loan may not be the best option.
Our lenders specialise in short term loans, they are not designed for long-term borrowing. If you find that you are struggling financially, we recommend discussing your situation with an impartial organisation, such as The Money Advice Service.« All You Need to Know about Guarantor Loans in the Coronavirus Crisis Could The “Four Pots Method” Give You Total Control of Your Finances? »