Loans and other forms of credit used to be reserved solely for those in permanent, full time employment with the unemployed and people on benefits automatically declined regardless of circumstances.
Fortunately, things today are quite different. This narrow approach to assessing applications has been replaced by a broader, more inclusive set of eligibility criteria with plenty of benefit loans now available across the USA.
Read on to learn more about how benefit loans work, alternatives to payday loans on benefits and how you can improve your chances of finding the most competitive quotes available on your next line of credit.
Just because you’re on welfare or other state benefits shouldn’t stop you from getting access to the funds you need when life throws you a financial curveball.
In terms of borrowing and repaying funds, benefit loans work in exactly the same way as traditional personal loans in that you’ll be able to borrow a fixed lump sum which is repaid either in one go or over a convenient number of months.
The key differences lie in the way your loan application is assessed. Rather than focusing solely on your source of income, specialist loans for people on benefits paint a broad picture of your circumstances.
This gives them far more flexibility and understanding when it comes to providing loans where other lenders may have automatically said no.
As well as the personal loans for people on benefits that we’ve already discussed, there are other avenues to consider.
Guarantor loans are a great way to reduce the risk to your lender by opting for someone you know and trust to stand as your guarantor during the term of your loan. If you’re unable to make repayments on your benefit loan then your guarantor will step in and take over the responsibility for these repayments.
Secured loans are another excellent resource for those trying to get loans on benefits. By securing your loan against an asset or property of value, this will again reduce the risk to the lender and potentially give you access to more favorable rates.
Payday loans and short term loans often get mistaken as the same. It’s important to understand the difference as all payday loans are short term loans, but not all short term loans are payday loans.
Your ability to get payday loans on benefits will depend on the type, frequency and amount of welfare that you’re currently receiving.
To put it simply, if you don’t technically have a payday then you won’t be able to get a traditional payday loan. However, there’s nothing to stop you from taking out a short term loan which is repaid in just a few days or weeks.
No matter what your circumstances, you’ll need to fulfill a number of basic legal criteria to be considered for benefit loans. These include, but are not limited to:
All benefit loans bring their own qualifying criteria to the table. You may also need to provide evidence of other forms of income to verify your application and it’s well worth getting a good idea of your own credit score before applying to help you select the most appropriate lender.
Applying for benefit loans is now quicker and easier than ever before thanks to the instant online assessment systems now in place with most lenders.
To give yourself the best chance of getting a competitive rate on benefit loans you’ll want to start with a personalised credit comparison. Tell us more about you and the loan you need and we’ll bring a huge range of suitable benefit loans from across the market straight to your smartphone, screen or tablet.
Compare interest rates, the total amount repayable on each option and more, and select a lender that meets your individual needs. Typically customers can complete the entire loans on benefits online application in minutes and, if approved, funds can often be transferred straight into your checking account within just 24 hours.