Being unemployed or on benefits can sometimes restrict you from accessing payday loans and other forms of unsecured finance. However, at Payday Loans Hub, we work with a number of lenders that offer a range of products and we will aim to find a loan to suit your requirements.
We understand that just because you are temporarily unemployed or on disability benefits, it should not stop you from borrowing the £200 or £500 that you need. After all, we can all fall on hard times which are not always our fault, whether it is seasonal unemployment, a harsh winter which increases your electricity bills, a broken boiler, car repairs and other household emergencies.
Start by applying online and complete our application form in less than 5 minutes. Our system will aim to match you with a lender who is most likely to approve your loan, based on your circumstances. So if you are looking for payday loans on benefits or you have bad credit, we will endeavour to find a loan that is right for you.
What are the loan terms from Payday Loans Hub?
Customers can apply to borrow £50 to £2,500, although this may be less for people on benefits or in unemployment. The loans are typically repaid over 3,6 or 12 months in equal monthly instalments, so you know exactly how much you are going to repay each month and you have the option to repay your loan early at any point.
We are a licensed credit broker and aim to find loans for:
- Unemployed (temporary or short term)
- On benefits (SSI and DWP)
- Disability benefits
What options are available for people on benefits or unemployed?
Alternatives: The nature of payday loans for benefits is that they are unsecured and you will typically need a good credit history or regular income in order to be approved. However, there are alternative to payday loans available which do not require credit checking and instead use other forms of security to add credibility to your loan application.
This includes adding a guarantor to your application and this is ideally someone with a good credit history and stable employment who agrees to co-sign your loan agreement and cover repayments if you cannot. For the lender, this adds a lot of trust that someone with a good credit rating is willing to trust you and act as your guarantor.
Other options include using some form of collateral or security. Under the form of a secured loan, you can offer something valuable you own to a lender such as a car, van, property or piece of jewellery. You are able to extract the value from this asset and the lender will allow you to borrow money against it.
Borrowing from family and friends: This is in fact the most common type of borrowing in the UK and indeed the world. Borrowing from your loved ones does not require a credit check or affordability, since they will always want to help you in your time of need.
Whether it is receiving money from your parents, siblings or friends, this can be a better alternative to payday loans for people on benefits as it can be given to you faster, with no interest payments or default charges. Borrowing from people you know comes with risks and there are certain measures you can take to stop it from going wrong, you can read the guide from MoneyAdviceService here.
Credit unions: This refers to non-profit organisations that are put together by a group of members, such as churches or people in your local community. The idea is that they can offer short term loans with very low interest rates at around 26% representative APR. There are no late fees if you cannot repay and you can usually borrow up to £500. You must be eligible to apply such as being part of your local community or a member of a certain group, but this type of loan is available to assist people from different circumstances.
Budgeting loans: This is a type of government loan which is interest free and put aside specifically for those on benefits. It is designed to help people with every day expenses including food, travel and toiletries. The amount you can borrow is up to £800 and you must have been on certain types of benefits for at least 6 months, since this is the type of thing which is usually available to assist families. For more information, read here about budgeting loans.
How can I get approved for payday loans on benefits?
To be approved for payday loans, you will need to demonstrate your creditworthiness to a lender and an ability to repay your loan on time without going into arrears. This will likely mean that you will need a stable employment and income and also move away from benefits – as this will show a regular income coming in and an ability to make repayments.
Fortunately, there are always new opportunities out there in the workplace and your credit rating is something that can be improved. With free trials available from credit reference agencies, they can provide step-by-step instructions on how to improve your credit rating such as closing any unused cards, consolidating your debts and even using credit builder credit cards.
Payday Loans Hub offers an impartial and free comparison service and by making an application online, you will be presented with a number of different options and products which are best suited to your requirements.