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The benefits that you receive do not always cover your daily expenses. You might have to take a small loan sometimes to make both ends meet. For obvious reasons, the market for “Benefit Loans” or loans for people on benefits has observed reluctance in lenders while approving the loans. The prime lenders in the market downrightly reject any loan application received from a person on benefits.

But, there are specialist lenders in the UK who still allow benefit loans. They have been known to approve loans to people with poor credit history, who are unemployed and even to those who are managing bankruptcy. These loans start from a £100, and can go up to £10000, depending upon your lender. These direct lenders offer flexible repayment options, helping you to remain stress-free about the repayment.

When are you eligible for applying?

Not everyone receiving benefits is eligible to apply for a loan. You should have been receiving benefits since minimum 26 weeks.

The lenders include income support, disability benefits, housing allowance, support allowance, family/working tax credit, jobseeker’s allowance, and pension benefits as valid benefits in the list of people eligible for receiving a loan. Although, the list might vary from lender to lender. You will need to read each lender’s eligibility criteria for benefit loans before applying.

Here are your options:

There are a few types of loans that people on benefits can avail:

  • Guarantor Loans: A guarantor speeds up the approval of your loan application. The lender’s reluctance of giving money to you is overcome when a guarantor signs up to repay your debt if you are unable to do so. The guarantor makes you a less risky borrower.
  • Payday loans: The lender charges a high rate of interest by giving you a payday loan for a short period of time, generally ranging from a few weeks to a few months. The loan is repayable on the day of your next receivable pay or benefit cheque.
  • Doorstep loans: For times when you need cash, or have some kind of disability, many direct lenders provide services to deliver your loan amount to your home, and to receive the return payments directly from your doorstep. These are called doorstep loans, since all the services related to your loan are given at your doorstep. Knowing your physical address also reduces the risk to the lender.

Is taking a loan wise when on benefits?

Being on benefits indicates that you are already having financial issues and your income is not satisfactory. While common sense would dictate that any more monetary burden would suppress you even more, there are situations that you just cannot handle without outside help. Sudden and unexpected emergencies can befall any time, and you might not be prepared financially to face them. These emergency loans for people on benefits are for exactly those times, where no other remedy seems possible.

It is always advisable to first calculate your affordability, before deciding the loan amount. You should resist from borrowing an amount that you would not be able to pay back. It is essential to choose the right amount, and the right repayment plan. A loan taken for coming out of financial troubles should not push you deeper inside.


Generally, people with difficulty in income are the ones who receive benefits of any kind, and they are the ones, who are in most need of emergency loans. Benefit is not all you can get to survive, loans can help you too. Sites like FirstFinance guide you towards the right loan to help you. You are not judged on what you need money for, and this loan might save you from a terrible financial crisis too.

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