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There's a common misconception that if you're on benefits or government welfare that you won't be able to access personal loans, credit cards and other forms of finance when you need it.
The reality is that whilst this may have been true 10 or 20 years ago, there are now a number of mainstream and independent lenders that specialise in offering benefit loans to those in receipt of these payments.
Lenders simply want to know that you can comfortably afford your repayments. Other factors such as your credit score, employment status and residential status can play a big part in whether you'll be accepted for loans on benefits.
Read on to learn more about how payday loans on benefits work and what you can do to improve your chances of being accepted.
Benefit loans provide a valuable lending resource to those who are currently in receipt of government benefits. They work in exactly the same way as traditional payday loans in that you'll receive a fixed lump sum which is repaid, with interest, over a fixed period of time.
Usually these short term loans are repaid on your next payday, however you'll be able to tie these repayments in with the dates you receive your benefits.
If you're on benefits and find that you can't get a traditional payday loan off your own individual merits then other accessible options are available.
Unlike traditional loans, getting loans on benefits can also involve using assets such as a house or vehicle for security on your loan, although these are typically for much larger borrowing amounts than payday loans on benefits.
Similarly a guarantor loan will allow you to ask a friend, family member or colleague who is willing to guarantor your repayments, helping to reduce the risk to lenders and increase your chances of being accepted.
Once you've been approved for your benefits loan, funds will typically be sent straight to your bank account in as little as 24 hours with some lenders even offering same day transfers.
Yes. Depending on the type of benefits loan you're applying for, you may still be able to get access to funds even if you've had issues with credit in the past. All of the lenders use different assessment criteria when deciding whether or not to offer credit.
Even if you've been declined elsewhere, we're constantly expanding our range of lenders giving you a better chance than ever before of finding a suitable lender. Also if you can't find credit on this occasion then it's well worth getting an up to date comparison if your employment status, income or credit score changes. Most credit agencies allow you to check your credit score free of charge, so it's beneficial to take a look to help you identify what's holding you back from getting benefit loans.
Remember, that by accessing borrowing options such as guarantor loans, you'll be able to leverage the good credit of someone you know to help ensure that you can be accepted regardless of your credit history.
The most important part of applying for loans on benefits is to make sure that you choose a provider who is likely to be more understanding of your personal circumstances.
At Viva Payday Loans, we'll help to take the stress out of comparing hundreds of individual lenders by presenting you with the most suitable, competitive loans from our panel.
Once you've found a lender that you're happy to go with, it's down to you to provide them with a few additional details about your income, including your benefits, before receiving an instant online decision. If accepted, simply sign and return your digital credit agreement and the process of releasing funds will begin straight away.