Is it possible for you to secure loans while living on benefits? Will the lender accept your bad credit without asking for any guarantor? These questions are sure to bother you when there is no steady income.
If you go by the traditional idea of borrowing, this might seem unachievable. Lenders have stringent rules and you cannot fulfil them with your setbacks. Only some exceptions can save your day.
You are not the only person who is living with the poor credit stigma. The ‘no income’ status has made you incompatible with conventional loan options. However, with direct lenders, you can find a solution to this problem as well.
How would that be possible? These lenders have made provisions to accommodate your requirements. They have changed their mindset by starting to focus on practical aspects like affordability.
Are these lenders capable of giving 100% support?
With them, you can expect some relaxation. However, complexities might intensify in your case in the form of very low credit scores. This situation is also an indication that affordability cannot be noteworthy.
Does that mean all roads are closed? No, you can still make it through the dead end. Apply for very bad credit loans with a direct lender in the UK despite living on benefits.
In this case, your financial condition cannot guarantee repayments. For this reason, you must compensate the gap by producing a guarantor or collateral. Talk to your lender to work out a midway.
Keep reading this blog for a comprehensive idea of this type of borrowing.
Receive loans with poor credit and no additional condition
You can receive benefits when you are unemployed or disabled. This financial help is intended to help you keep up with basic expenses. Therefore, when you apply with a direct lender, they would like to confirm your income source.
For them, having earnings from direct employment is not mandatory. Income from benefits is perfectly alright as you can manage and repay loan debts. With a few adjustments, getting through repayment will not be difficult for you.
A few questions should be on your checklist before you go ahead.
Is it possible to get loans without any obligations?
When you are living on benefits, bad credit might happen. Since you have to tackle payouts with limited money, some expenses remain unaddressed. This results in poor credit scores.
You should not blame yourself as you can try something better. Earnings from benefits are not going to be huge but rather average. However, your expenses will keep increasing with time.
In this scenario, you must try to get a side job for additional income. Not only it does help you afford surplus expenses but also improves your borrowing eligibility. Showing your earnings, you can ask for loans with no guarantor from a direct lender.
A side income enhances your affordability which is the biggest concern for any lender. Otherwise, you might have to fulfil conditions like security against the loan amount.
Can you borrow whatever amount you like despite poor scores?
With direct lenders, you have the freedom to apply for any amount. However, it should fall within the borrowing range that the lender offers. They are not like traditional lenders who are strict about the amount you should borrow.
No matter how much the range is showing. You must stick you a safe amount that is affordable. Not to forget that repayment has to happen after a specific tenure.
If you take out a huge amount, you have to pay back a bigger amount. This is because of the inclusion of interest rates. Therefore, you must be careful about the extent you should borrow.
If you cannot make it to loan payments on time, additional fees will follow. You will have to bear the burden of penalties. Moreover, your credit scores will suffer because of defaults.
Instead of picking any random amount, focus on your needs and suitability. After all, these are debts and you must maintain a safe distance.
What ways can you make the most out of these loans?
Although you are stuck in a difficult condition, you expect to reap the benefits of the accessible opportunity. Direct lenders will not disappoint you when it comes to offering additional features. They are aware of your stigma and want to help you in every possible way.
The advantages are the highlights of these loans.
Also an online application
You must have familiarity with the traditional method of application. There, you have to visit the bank branch quite a few times. Besides, you need to provide a lot of documents.
Direct lenders are synonymous with fast loan providers. For this reason, they have streamlined the process of application. You can now send the loan request from anywhere.
The application form will enquire about the least details. Moreover, you do not have to produce hefty paperwork for application.
No necessity for hard checks
As these lenders are keen on evaluating your affordability, hard verification does not make sense. A soft analysis of your ongoing financial condition would be enough. This means you should not hesitate to approach them even when you have bad credit tags.
Here, the lender needs no information about your credit scores. Therefore, you can apply for these loans without hesitating about your poor credit scores.
Speedy disbursal of funds
The processing of applications does not take much time. You would share a few details like name, address, email-id etc. Moreover, the lender does not have any requirement for credit history validation.
Credit checks are time-consuming procedures. Once the lender is able to confirm you can repay, half of the process is done. You need to accept the terms and conditions in the loan agreement to receive funds from the lender.
For ease of access, you will have the approved money in your checking account.
The bottom line
Having poor credit is not a drawback with the advent of direct lenders. You should not hold yourself back from trying to get a free loan proposal. This can help you ideate how the actual offer would look.
You can get them from as many lenders as possible.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
