Why is it that when we need something the most it’s no longer available to us? When you’re a bit down on your luck, it’s always a lot harder to borrow money. Don’t despair as you can still get approved for quick cash loans when on benefits, even if you have a bad credit history.
You may as well forget turning to the banks as they credit score applicants and will reject you. They’re happy to lend you money when you don’t need it, but not when your circumstances deteriorate. Instant loans for people on benefits remain widely available from specialist adverse credit lenders.
Types of Instant Loans when on Benefits
Doorstep loans: Not to be confused with a loan shark, doorstep lenders are legitimate businesses that offer instant loans for people on benefits. You’ll need to demonstrate that the repayments are affordable, but being out of work, jobless or unemployed is not an issue. Neither is a bad credit history.
Family loans: You can avoid usury interest by borrowing money from a member of your family. Provided that they aren’t also in difficulty, it doesn’t hurt to ask if they’re prepared to help you. You’ll benefit from a very low rate of interest and be able to spread the cost of repayment.
Pawnbroker loans: Pawn shops offer same day cash loans when on state benefits. There are no credit checks, but you’ll be expected to provide collateral (gold, jewellery or electrical equipment). You’ll normally receive your payment in cash within just minutes.
What is the Cost of Instant Loans for People on Benefits?
Although rates can and do vary, you’ll discover that loans when on benefits aren’t a cheap option. Despite providing collateral, a loan from a pawn shop normally costs in the region of 20% to 25% per month. You should check the rates with several different lenders before signing-up.
The rates charged by doorstep lenders vary considerably based on the amount and duration. A £50 loan for the unemployed from Provident Personal Credit for the minimum term of 14 weeks has an APR of 1068.5%. However, a £500 quick cash advance over 52-weeks has an APR of “just” 272.2%.
Extending the duration of loans for people on benefits with bad credit is far more expensive. It may reduce the monthly repayments, but the amount of cumulative interest paid rises steeply. Keep the term as short as you can manage as you can always extend it later on.
Dangers of Fast Cash Loans for People on Benefits with Bad Credit
Same day loans when on benefits can help you pay a surprise bill or meet urgent expenses, but they do hold a few potential perils. Once you’ve repaid the principal and any interest that has accrued, you’re going to be left with less money in future months.
Although instant loans for people on benefits is one way of negotiating your financial difficulties, there are other options. Don’t borrow money if you have no hope of ever repaying it. If you haven’t already explored this option, you should seek advice from a free credit counseling service.