It might seem hard to be accepted for a loan when you’re on benefits. Although major banks may refuse you and other lenders may have you jump through hoops to apply, certain lending providers take a different approach.

You may be able to receive the money you need if you have a steady source of income (including certain sorts of benefits).

Although we cannot promise that you will be accepted, many of the lenders on our panel are ready to evaluate various sources of income and will not dismiss your application merely because you get government assistance.

Continue reading to learn how to apply for a simple short-term loan while on benefits. Here is our complete guide to the Loans for People on Benefits – Complete Guide.

Is it possible to secure a loan while on benefits?

Is it possible to secure a loan while on benefits

Yes, perhaps. That’s the quick answer, but it’s hard to determine whether or not anybody will be able to secure a loan. Before judging a short-term loan application, lenders analyse various factors.

Every lender has its own set of accepted standards, and although some won’t lend to those claiming benefits, others are far more lenient.

The capacity to repay what you borrow is crucial to every successful loan application. Lenders want to see that you have a consistent source of income, whether it’s through a job or something else.

They’ll next look at your credit score and financial history, but having an income that will enable you to repay your loan is typically more important.

Some lenders may even consider some types of perks as income. Long-term benefits like Personal Independence Payment and Disability Living Allowance are treated similarly to a wage, but many other benefits are also examined.

Which perks are considered income?

Which perks are considered income

The kind of benefits you get may impact your ability to obtain a loan. Some lenders will only accept applications from those who get long-term benefits, while others may look at a broader spectrum of advantages.

The lenders on our panel are often ready to accept the following perks as a regular source of income:

  • Disability Allowance for Living (now being replaced by PIP – Personal Independence Payment)
  • Allowance for Work and Support
  • Tax Credit for Employees (now being replaced by Universal Credit)
  • Tax Credit for Children
  • Benefits for Children
  • Benefit for Incapacity
  • Allowance Promotion
  • Injuries in the Workplace Benefits for Disabilities

Housing benefits, Income Support, Pension Credits, and Job Seekers’ Allowance are less likely to be considered regular sources of income by lenders. However, this varies per firm.

Is it possible to secure a loan using Universal Credit?

Is it possible to secure a loan using Universal Credit

You may be able to do it. Universal Credit is seen as a regular source of income by certain lenders. Thus, it may use to support your loan application.

Although some lenders specialise in loans for persons on benefits, your borrowing choices may restrict compared to those working and having a larger income.

What are the requirements for participation?

What are the requirements for participation

Even if you have a steady source of income, you must still satisfy certain requirements to be authorised for a short-term loan. These are the following:

You must be at least 18 years old, a UK resident, and have a UK bank account.

What is the maximum amount you can borrow?

What is the maximum amount you can borrow

You might be approved for a loan of between £100 and $5,000 if you match the standards given above. You may choose a payback time that fits you in addition to the amount you wish to borrow. The repayment choices offered will vary depending on how much you borrow.

If your loan is between £1,000 and £2,500, you have the option of repaying it over 12 to 36 months.

You may select between 12 and 60 months to repay a loan of more than £2,500.

Is a guarantor required?

Is a guarantor required

In a nutshell, no.

While other organisations may demand a guarantor to accept short-term loans, does not provide guarantee loans. However, since we only have a few guarantor lenders on our list, you may be required to find a guarantor if we believe one of them is the best fit for your situation.

People who have had credit card problems in the past utilise guarantor loans. Because the lenders on our panel care more about your current financial situation than your credit score, you may be able to be accepted without a guarantor.

How to Apply for a Benefits Loan

How to Apply for a Benefits Loan

While it might be difficult to get a loan while on benefits, we make it easy to obtain the funds you want.

Fill out our short application form, specify how much you want to borrow, and a payback period that works for you.

After that, we’ll do a soft credit check to determine whether any of the lenders on our panel are likely to approve your loan request.

We’ll connect you to the direct lender if your application is conditionally approved. You may then pick whether or not to finish their whole application.

All registered and regulated UK lenders are required by the Financial Conduct Authority (FCA) to ensure that their loans are affordable to customers.

Is it possible for me to receive a loan quickly?

Is it possible for me to receive a loan quickly

We may be able to assist you if you are on benefits and need a loan right now. Our lenders can make quick judgments on your application, and if you’re accepted, they’ll deposit the funds into your account the same day, sometimes even within 15 minutes. As a result, even if you’re on benefits, you may be able to get a modest loan quite fast.


When you request a short-term loan, the lender has a legal and ethical obligation to do certain checks before choosing whether or not to accept your application.

As a result, it’s critical to double-check that you’re qualified for the loan product you’re asking for. All lenders will need that you demonstrate your capacity to make the repayments on the loan for which you are applying.

The minimum income requirement may vary per lender and greater for larger loans.

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