Are you receiving benefits?
Are you receiving benefits and looking for a loan but unsure of your options? Maybe you're applying with lenders and confused as to why you're being declined? If so, don't fret, this guide is here to make things as straightforward as possible to ensure you Choose Wisely and find the best deal.
Know your credit history
If you've suddenly been made redundant or had a life-changing event that has meant giving up regular work then it's likely to have negatively impacted your credit file. If you do have poor credit, don't panic, you still have options but it's crucial you understand the status of your credit file and know where you stand before you start your search. You can find out more about how to manage your credit file in our guide to understanding your credit file.
Make sure you can afford it
The bottom line is if you can't afford to repay what you borrow then providers won't lend to you. If you can afford to repay your loan and you receive a regular income, even job seekers allowance or disability living allowance then you have options. A good start is to draw up a simple household budget using the free Choose Wisely budget guide.This will enable you to quickly see your incomings and outgoings and cut out any unnecessary spending.
Types of benefit loan
Benefit loans aren't a product in themselves but instead, a term used to describe suitable loan products for those receiving benefits and looking for a loan. If you're looking for a loan on benefits naturally you're a higher risk than those in full-time employment or receiving a steady income. As a result, you can expect to pay a higher rate of interest but this doesn't mean there aren't deals to be had. Be sure to compare your options and ensure to match the lender's acceptance criteria before you apply. You can compare benefit loans simply and quickly by using our benefit loans comparison table.
Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.