How does income support affect my chances of getting a loan?
If you receive income support, you may find it hard to both find and pay off a loan.
Income support is given to people on a low income to help them get by. Many lenders are hesitant to lend money to people on income support.
Lenders have their own internal checks, including the Affordability Assessment, in order to determine whether they can lend money to customers. If you receive income support, you may be less likely to pass these checks. You can find more on this in our ‘What is an affordability assessment?’
However, that doesn’t mean there’s no hope of getting credit, there are many lenders who will still consider your application.
Where could someone on income support get credit?
Doorstep loan companies, like us, will consider applications from people on income support. If you’re approved for a loan, an Agent will come and visit your home in order to discuss your circumstances and complete an Affordability Assessment, which makes sure you can afford to pay back the loan. What’s more, your Agent works around you- collecting repayments at a time and day which suits you. This service is not always provided by other lenders.
People on benefits might be able to get a budgeting loan from the government to be used on essential things like clothes, food and rent. It’s interest-free, so you only pay back what you first borrowed.You have to repay the loan within 104 weeks, and budgeting loans don’t affect other benefits.
Credit unions are designed to offer a lifeline in less well off communities for people who are struggling with their finances. They have their own criteria as to who they can lend to, in some cases you need to already have savings with them before they’ll lend to you.
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