Can I Get a Loan If I Am on Benefits?

If you are on benefits in the UK yet need a loan, whether a payday loan or a short-term loan option, you may be eligible. However, if you receive government income support, the likelihood of securing a loan in the UK will be lower than if you were a full-time employee.

Nevertheless, you may still find loans in the UK if you are on benefits. Always remember that you should never apply for a loan of any kind (even if just to borrow £300) if there is any reason that you may not be able to repay the loan on time.

Drag the slider below to the amount you'd like to borrow
By clicking “Apply Now”, I consent and agree to the Privacy Policy and Terms of Site Use.

What Are Benefits?

Benefits and tax credits are forms of income support given by the UK government. In order to receive benefits, you will have to qualify for them.

For example, if you’re a single parent without full-time employment, then you may qualify for some income support until you secure employment.

Similarly, individuals with a disability or illness are also entitled to benefit support from the UK government, usually in the form of Universal Credit. People with a low income may also qualify for some additional income support through benefits.


Generally, benefits help those who:

  • Are out of work

  • Have a low income

  • Are pregnant

  • Are caretakers

  • Have children

  • Are sick or disabled

  • Have been bereaved

  • Retired and on low-income

Benefits include income support like Universal Credit,Pension Credit and Housing Benefits. The type of benefit you qualify for depends on your needs and financial situation.

Can I Get a Loan If I Am in Receipt of Benefits?

You may still apply online or in-person in the UK for a loan even if you receive benefits. However, before submitting an application, it is best to check with the lender whether they work with applicants receiving benefits.

Lenders require applicants to provide income information. You will need to provide your benefit information in this section of the application. But, keep in mind that being on benefits may limit your eligibility for a short term loan.

Furthermore, if you are on benefits and would like to borrow a loan, you should also check whether it is the right choice based on your current finances.

You may be required to provide a guarantor, such as a family member or friend, to be eligible for the loan. Similarly, you may only qualify for secured loans, which will require you to pledge an asset like a house or a car in case you cannot repay the money.

If you opt for a guarantor loan, keep in mind that the guarantor will assume the responsibility of repaying the loan if you default. Furthermore, if you fail to repay the loan, your credit score can be damaged, as well as your guarantor’s. If you fail to repay a secured loan, the lender may repossess your asset and sell it to recoup losses.

Which Benefits Count Towards My Income?

Benefits that may count as income include:

  • Personal Independence Payment

  • Universal Credit

  • Child Benefit

  • Incapacity Benefit

  • Child Tax Credit

  • Employment and Support Allowance

  • Fostering Allowance

The lender will likely ask you to include the amount of your monthly benefits on the application. They may also require additional documentation to verify this income.

How Can I Apply for a Loan on Benefits?

If you’d like to borrow a loan, typically from £100 to £5,000, then you can shop around online. Regardless of whether you receive benefits or not, the application process will be the same.

You will have to fill out an online loan request form stating how much you’d like to borrow, as well as how much monthly income you receive from benefits.

Provided you meet the necessary eligibility criteria set out by the lender, you may be offered a loan. Reputable lenders will also run some quick background checks, such as a credit check, to see if you’re a suitable borrower.

If accepted, you may receive the funds in as little as one business day. Repayments will also automatically be deducted from the same account.

Can I Get a Loan If I Am on Benefits and Have Bad Credit?

Unfortunately, it will likely be more difficult to be eligible for a loan if you are on benefits and have bad credit. Most lenders will likely see you as a high-risk borrower. Nevertheless, you can take steps to improve your credit. These include:

  • Checking your credit history for inaccuracies or mistakes

  • Pay off existing debt

  • Make timely payments

What Are the Alternatives to Loans for People on Benefits?

Many applicants who receive benefits will likely not be eligible for a loan. In these circumstances, they may look for alternative financing options.

For instance, if you’re on Universal Credit, then you could ask for an advance on your payments. Keep in mind that you will have less money coming in the following month, so you will need to budget accordingly .

Loans can also carry high-interest rates for those on benefits, as some lenders consider these types of applicants riskier. Therefore, you could consider borrowing money from a trusted family member or friend..

This way, you could come up with your own repayment plan according to both of your personal financial needs. However, borrowing money from friends or relatives can lead to strained relationships if you avoid or miss repayments.

Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
This website uses cookies in order to give you the best experience while using our service. By continuing, you agree to our Cookie Policy.