Loans for People on Benefits

Whether you're looking for a loan whilst on universal credit or need options for bad credit and benefits, we've got you covered. Let's explore the possibilities and empower you to Choose Wisely.

Why Compare Benefit Loans With Choose Wisely?

Choose Wisely is a free to use financial comparison site. We are here for you and the millions of people that are being shut out of mainstream finance.

  • Extensive panel of specialist lenders
  • Check your eligibility before you apply
  • Compare with no impact to your credit file

Table of contents

Written by Mark Grimley
Read time: ~5 mins
Published: 27th September 2023

Can I get a loan on benefits?

You may wonder if it's possible to get a loan while on benefits, and the answer is yes. Many lenders recognise the unique circumstances faced by individuals on benefits and offer tailored loan products to assist them. Choose Wisely partners with a range of lenders who specialise in providing loans in a variety of circumstances.

How do I get a loan on benefits?

Here are some general steps to follow:

  • Reasearch and compare lenders: The Choose Wisely Eligibility Checker allows you to compare different lenders and their offerings to find the best fit for your needs.
  • Complete an application: Once you've identified a suitable lender, click on the "Apply Now" link provided. You'll then be directed to the lender's secure application form.
  • Provide accurate information: Provide any additional details that are required. Make sure this is accurate as lenders use this information to assess your eligibility and determine the loan amount you can borrow.
  • Submit the application: Double-check the application for any errors or omissions before submitting it. Make sure you've included all the necessary supporting documents requested by the lender.
  • Loan assessment and approval: The lender will review your application and assess your financial situation. Before final approval all lenders will perform a hard credit check, but don't worry if you have bad credit - Choose Wisely's panel has many lenders that understand the financial challenges that some individuals may have faced in the past. If approved, you'll receive an offer outlining the loan terms and conditions.
  • Loan agreement and funds: Carefully review the agreement, ensuring you understand the terms and any associated fees. If you're comfortable with the offer, sign the agreement electronically. Upon completion, the funds will be send to your chosen bank account, often within a few hours or a few business days.

Whare can I get a loan if I'm on benefits?

At Choose Wisely, we allow you to easily compare lenders who will consider your application. By working with reputable lenders, we ensure that you have access to reliable options and can make an informed decision.

What loans can I get on benefits?

When it comes to loans for people on benefits, various options are available. These may include:

  • Universal Credit Loans: If you're receiving universal credit, you can explore loan options specifically designed for individuals in this situation. These loans take into account your benefit income and offer repayment terms that align with your circumstances.
  • Bad Credit Benefit Loans: Even if you have a poor credit history, come lenders specialise in providing loans to individuals on benefits with bad credit. These loans consider your benefit income and other factors, giving you a chance to rebuild your credit score.
  • Pay Weekly Loans on Benefits: Pay weekly loans provide a flexible repayment option for those on benefits. These loans typically involve smaller repayment amounts spread over weekly instalments, making them more manageable for individuals on a limited income.

What are the pros and cons of benefit loans?

Receiving benefits shouldn't restrict your access to financial support. Benefit loans can be a stepping stone towards improving your financial situation. However, it's essential to consider the pros and cons before making a decision.

Pros of Benefit Loans:

  • Accessibility: Benefit loans are designed for individuals on benefits, ensuring greater accessibility to financial solutions tailored to their unique circumstances.
  • Credit Improvement: Repaying a loan on time can positively impact your credit profile, helping you rebuild your credit history and potentially access better financial products in the future.
  • Flexibility: Benefit loans often offer flexible repayment terms, allowing you to manage your money more effectively within your budget.

Cons of Benefit Loans:

  • Higher Interest Rates: Benefit loans may come with higher interest rates due to the associated risks for lenders. It's crucial to compare rates and terms to find the most affordable option for your needs.
  • Additional Fees: Some lenders may charge setup fees or other associated costs. Make sure to review the loan agreement carefully and factor in any additional fees when considering a loan.

Is a benefit loan a good idea?

Choosing a benefit loan depends on your individual circumstances and financial goals. Consider the following factors before making a decision:

  • Assess Your Needs: Evaluate your financial situation and determine if taking a loan is the best course of action. Consider alternative options, such as budgeting or seeking financial advice, if possible.
  • Understand the Costs: Thoroughly review the interest rates, repayment terms, and associated fees. Ensure you have a clear understanding of the total cost of the loan and how it fits into your budget.
  • Your ability to repay: Assess your ability to repay the loan based on your benefit income. Consider whether the loan repayments will be affordable and sustainable throughout the loan term.
  • Seek Advice: If you're unsure about the best course of action, seek advice from a financial advisor or a reputable credit counselling service. They can provide personalised guidance based on your specific situation.
  • Benefit Loans FAQs

    Can I get a loan on universal credit?

    Yes, there are loans for people on universal credit. Just ensure you include this income in your loan search application and you’ll be able to compare suitable options.

    How much can I borrow with a benefit loan?

    The loan amount you can borrow with a benefit loan depends on various factors, including your benefit income and the lender's criteria. Compare your options using Choose Wisely.

    How long does it take to receive funds with a benefit loan?

    The time it takes to receive funds can vary between lenders. In many cases, funds are disbursed within a few hours or a few business days upon loan approval.

    Are benefit loans only for individuals with bad credit?

    Whilst there are specific loans for those with bad credit and on benefits available, benefit loans cater to individuals on benefits, regardless of their credit history. Whether you have good or bad credit, lenders understand the unique circumstances faced by those on benefits and can offer suitable loan options.

Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

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.

Important Information.

All of the information in this guide is correct at the time of writing.

If you complete a loan search application on the Choose Wisely website, the rates shown may vary based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 13.9%APR to a maximum of 1721%APR Representative and loan repayment periods range from 3 to 60 months.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
You can access your credit report for free from Credit Karma, Clearscore or Experian.

Warning: Late repayment can cause you serious money problems. For help, go to