Regardless of if you are receiving disability benefits, you are eligible to apply for a loan. By law, banks and lenders must treat you the same as any other customer. Therefore, you’re just as entitled to apply for a loan as anyone else.
Those who work and have a regular income, as well as a good credit rating, should be able to find several borrowing options available to them. However, if you have a low income and are claiming benefits, you might find it difficult to borrow from banks and other mainstream lenders. In the event you need to borrow money to cover an unexpected expense, you might be eligible to borrow from a short-term lender.
Before taking out a loan, you should consider your financial situation and decide whether it’s the best option.
If you need a loan to cover bills or expenses, consider speaking to whoever you owe money to, explain your circumstances, and try to set up a repayment plan. Managing money can be hard. Take a look at our money management page for hints and tips on budgeting. You can also learn more by visiting Money advice service who provide free independent advice.
Those who get Employment and Support Allowance or Income Support may be able to apply for a Budgeting Loan or Budgeting Advance, which are interest-free and can be repaid with benefit payments. Learn more by visiting the Money Advice Service
If you’re unable to pursue these options, a short-term loan could help cover your needs. There are many different short term loans available, and so it’s best to find an option that suits your budget:
Keep in mind, when applying for any type of loan, the lender should carry out affordability assessments to ensure the loan is affordable and sustainable to you.
It’s also important to keep in mind that, due to the short repayment period, these kinds of loans often come with high APR rates (a high cost of borrowing) – which we explain on our page how do interest rates work
Before you take out a loan, make sure you’re confident you can repay the full amount (including interest) throughout the full length of the loan. Make sure you understand the lender’s key features of the product, including how and what fees are charged for late or missed repayments, what the loan repayments are, what the length of the loan is, what the total repayment amount is, and what the early settlement processes are etc.
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Can i take out a loan if i am on disability benefits