People can have many queries when applying for a loan. Here, we will discuss the loan options for persons receiving allowance from the government. Always remember to check the criteria of the lender first, when searching for a loan option. Not all companies have the same requirements. Some may require the customer to have a form of employment as compulsory criteria, whereas others may offer loan to person on benefit.
If you are looking for short term loans in the UK, then LoanPig is a good option for people on benefit. You can simply go towww.loanpig.co.uk to check their financial service and apply for payday loans online. It is a direct lender and broker approved and regulated by FCA.
If you have the proof of the required criteria, then you can rest assure that the loan would be processed on the basis of your ability to repay, excluding the financial problem you may be facing!
Does Your Credit Score Change When You Are On Benefits?
Getting allowance or benefits from the government is not shown in the credit report. Therefore, it does not influence your credit score. But, receiving government allowance shows that you depend on the allowance and have a tight financial situation most of the time. Some lenders may consider this situation detrimental for repayment on time and the loan application may be rejected.
What Are Your Credit Options?
There are other credit options available for people on benefits other than payday loans. Some of such are mentioned below for you.
- Secured Loan
These loans are secured by offering up collateral like assets, stocks and bonds. In case of default, the collateral would be sold by the lender to pay off the debt. The collateral can be anything that can be turned into money after the seizure. It eliminates any problem of eligibility for getting the loan.
- Guarantor Loan –
This loan is approved with a nomination of guarantor who would be held responsible to pay off the loan, if the borrower fails to repay. He is bound by the contract. Even if the borrower has low income and bad credit score, they can avail many loan facilities with a guarantor which may not be accessible otherwise.
- Credit builder credit card –
These special credit cards are for borrowers who have low income and poor credit scores. It helps them in building up credit history and improves credit score. It has a very low limit for credit and high APR. It also has less strict eligibility criteria unlike other credit cards. So, this is quite suitable for people dependent on government benefits.
Find a trustworthy lender who has a flexible system that is suitable for your condition. Be cautious of rejections as they would contribute to bad credit score and would remain in your credit file. It discourages the lenders from approving the loan. Therefore, make sure you research all the information regarding the necessary documents and conditions. It would reduce the chances of rejection of loan application.