Can You Get A Secured Loan When On Benefits?
Secured Loans > Help & Advice > Getting and managing a loan >
Can you get a secured loan when on benefits?
If you own your own home, you might be able to get a secured loan, even if you’re on benefits or have had borrowing requests rejected in the past. Approval largely depends on affordability and the individual criteria of lenders specialising in secured loans.
Are secured loans available for people on benefits?
It could be possible for people on benefits to be considered for secured loans. However, eligibility depends on a full affordability assessment, including income, outgoings and the sustainability of repayments.
Which types of benefit count as a source of income?
Exactly which benefits could count as or contribute to your source of income varies from lender to lender. At Evolution Money, we consider the following benefits when calculating income:
- Child Benefit
- Disability allowances like Disability Living Allowance or Personal Independence Payment (PIP)
- Certain elements of Universal Credit
- Pensions – state and private
Could you get a secured loan if your only income is from benefits?
Affordability is the primary consideration in loan application approval.
Benefits could be included as part of an affordability assessment, but they may not be sufficient on their own. Most lenders, including Evolution Money, have minimum income requirements to ensure repayments are sustainable over the long term.
If your only income comes from benefits, you may not be eligible, but this depends on your full financial circumstances, including outgoings and overall affordability
At Evolution Money, ensuring our secured loans are affordable for customers is a priority. We’ll ask you to do a thorough Income and Expenditure Assessment, so we can evaluate your unique situation.
Are secured loans easier to get if you're on benefits?
Generally speaking, you’re more likely to be approved for a secured loan than an unsecured (personal) loan. This is because securing the loan against your property acts as a guarantee for lenders, reducing their risk. Loans secured against your property could have comparatively flexible terms because the home acts as collateral.
With unsecured loans, more emphasis is placed on credit history to provide reassurance that you’re likely able to keep up with repayments.
However, approval for a loan depends on meeting individual lender criteria, so secured loans aren’t necessarily easier to get than personal loans. Interest rates can vary depending on individual circumstances, including income stability, affordability and overall risk assessment.
Things to consider before applying for a secured loan
- Whether you really need what you’re taking out a loan for
- Your financial position and what you can afford to repay, now and in the long run
- Your loan-to-value ratio (your home’s value versus how much you owe on the mortgage)
- Loan interest rates and mandatory fees, and the possibility of rate rises
Are there alternatives to secured loans for people on benefits?
Before applying for a secured loan, you could consider alternatives. Other government benefits or grants from charities and local authorities might be available to you. There may be ways for you to safely free up spare cash or minimise outstanding debts. You could seek support from friends or family.
Find out if you're eligible for a secured loan on benefits
At Evolution Money, certain benefits could form part of your income assessment, alongside other regular income and outgoings, but all applications must meet our minimum affordability criteria. Check the criteria, see if you’re eligible – it won’t impact your credit score – and fill out an assessment form, letting us know how much you’d like to borrow and for how long.
Our Secured Loans could let you borrow between £5,000 and £105,000 towards expenses such as financing a new vehicle or paying for a house renovation, over a repayment period of 3 to 20 years.
Got a question about our loans? Contact our friendly team. You can also find more information on personal finance in our help and advice hub.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it.
Loans are subject to status and affordability checks.
Representative 21.54% APRC (Variable)
For a typical loan of £12,000 over 60 months with a variable interest rate of 21.54% per annum, your monthly repayments would be £310.60. This includes a Product Fee of £1,200.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £18,635.80. Annual Interest Rates range between 8.6% to 27.87% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
