Same day loans for those on benefits are more accessible than they ever have been. Once often overlooked as a source of income, benefits are covered by the government and therefore in theory, safer than many other income streams.
There will be a limit on the amount you could borrow, but there are certainly options available in the marketplace.
It is perhaps unfair to differentiate same day loans for those on benefits against a same day loan supported by another income stream. In theory, the flow of benefit income would only reduce/stop in the event that the individual was able to find employment and replace this income.
There are obviously various aspects to take into consideration which we will cover in this article.
How Quickly Can I Get a Same Day Loan on Benefits?
As the term suggests, all being well, you should be able to obtain a same day loan almost immediately. The Internet has changed the way the financial industry operates, and you can now apply 24/7 in the comfort of your own home at your convenience.
Assuming you can provide the relevant paperwork, figures and proof of income, approval should be almost immediate. In many cases, you will have the money in your bank within the hour and very often within 15 minutes.
It is worth noting that a same day loan application will be treated the same whether your income comes from benefits or employment.
Will My Credit Rating Be Taken Into Account?
All regulated lenders in the UK are obliged to undertake a credit check against each same day loan application. In reality, very often those applying for same day loans have been struggling in the past, and they may have a chequered financial history.
This might include a number of missed payments on previous finance which will obviously have an impact on their credit rating. To a certain extent, same day loan/payday lonely lenders expect a degree of financial difficulties.
As long as you can prove you are in receipt of regular income and are able to budget with repayments in mind, then there is every chance your application will be approved.
What Level of Interest Rate Should I Expect to Pay?
Gone are the days of huge interest rates on unregulated products, but when looking at same day loans, they can still vary between around 50% and up to 1500% per year.
In many ways, the higher figure is somewhat misleading because very often this will be a short-term loan, with the average loan around £100, where the interest rate has been annualised.
When looking at a loan of £100, the return needs to reflect the costs and include a degree of profit for the lender.
Therefore, very often, the annualised rate can look out of place when, in reality, the cost of the loan in pounds sterling can be relatively modest.
What Is the Maximum Loan Amount Available?
As we touched on above, the average same day/payday loan is around £100 and repayment within 30 days. Regulations introduced by the FCA back in 2014 have changed the market completely and extend not only the term but also the amount of lending available.
It will obviously depend upon the level of regular/secure income as to the maximum loan amount. The idea those same day lenders are willing to take undue risk is a fallacy, but the interest rate will always reflect the risk/reward ratio.
It is not inconceivable that an applicant on benefits would be able to secure a loan of several thousand pounds.
However, there needs to be a detailed degree of planning and awareness of the underlying interest rate and cost of the loan.
Are There Any Alternatives?
The UK government offer an array of emergency loans for those struggling to make ends meet who are currently in receipt of universal credit.
The level of assistance can vary dependent on the individual’s personal situation with some loans, including an element of future benefits paid early while others are repaid over a length of time.
There may even be funding available which does not have to be repaid.
Do I Need to Be Employed to Get a Same Day Loan?
There is a common misconception that in order to obtain any type of finance, you need to be in employment. As long as you have a regular flow of income, in this instance via the benefits system, and you are able to budget accordingly, there is no reason why your loan application should not be approved.
In many ways, you could argue that universal credit is guaranteed by the government and therefore potentially more secure than employment income – especially at this moment in time.
What if I Struggle to Make Repayments?
Before applying for a same day loan, which can vary in duration from just a few days up to 12 months, you need to look at your income, your monthly expenses and whether you can afford the loan repayments. No matter how meticulous you are with your budgeting we all from time to time experience unexpected costs which can impact our short-term cash flow.
So, if you are struggling to make repayments, you should contact your lender immediately and see if they can make any adjustments to help in the short-term.
If your situation has changed dramatically and you simply can’t afford the repayments, with little likelihood this will change in the short, medium or long-term, you may need to take additional advice.
Where Can I Find the Best Same Day Loan Offers?
It will depend to a certain extent on the level of lending you are looking to obtain, but if you are talking into the thousands of pounds, then it may be worthwhile contacting a credit broker.
They will be able to look at the market and advise you of the best deals for your situation. Even a relatively modest reduction in headline interest rate can lead to significant savings, especially on loans into the thousands of pounds.
So, if you are struggling in the short-term and require financial assistance, it may be in your best interests to approach a credit broker.
The idea that same day loans are not accessible to applicants on benefits is simply wrong.
As long as you can prove you have regular income and you can afford the repayments there is no reason why your loan application would not be looked on favourably.
How Can Flexy Loans Help?
Here at Flexy Loans, we have partnered with some of the UK’s leading Lenders.
They have already helped thousands of people get loans already, and they can do the same for you.
Choosing a loan broker like us (we don’t charge any fees) means our application process matches you with the best loan available to you. All lenders we recommend are regulated by the FCA, which gives you an additional layer of protection.
To apply and see what loan is available to you, click on the below and answer the question