When a lack of money leaves your family in immediate financial peril, you can apply for budgeting loans from the social fund to help with your short-term money troubles. Job centre plus crisis loans for up to £1,500 are provided to working and non-working people on an interest-free basis.
The problem is that most social fund budgeting loan applications are rejected by the Department of Social Security. Others are unable to prove their income, expenses, or provide bank statements. The good news is that there are alternatives to DSS crisis loans.
Secured Alternatives to Budgeting Loans from the Social Fund
Pawnbrokers: If you’ve got collateral, such as gold, you can use this to borrow money against. Just take your item of value to a local pawn shop, they’ll assess it’s value, and you’ll be able to get a cash loan with no credit checks. Your money will be handed over the counter to you within just minutes.
Buy now pay later stores: If you needed to apply for a crisis loan because you urgently need household goods, such as a new cooker, weekly payment stores are an excellent alternative. Pay just 29.9% APR and spread the repayments over a period of up to three years.
Homeowner loans: When you have sufficient equity in your home and can establish affordability, you can get a secured loan and repay the money over an extended period of time. Always think carefully before borrowing money against your home as non-payment could result in repossession.
Unsecured Alternatives to a Social Fund Budgeting Loan from the DSS
Payday stores: Provided that you’ve got a job and your own bank account, you can get a payday cash advance for up to £1,000 for a calendar month. For security reasons, the funds will be sent by bank transfer, but they’ll reach your account within a maximum of 24 hours.
Doorstep companies: New customers can borrow £500 and spread the repayment over up to a year. Apply for a doorstep cash loan online, over the phone, or through your local agent. These are one of the best loans for unemployed people with bad credit or no credit history.
Credit unions: You can join on the basis of a shared interest, such as work, religion, or locality. Once you’re a member of a credit union, you’re eligible to borrow money with bad credit from a non-profit lender. They’ll even work with you to make sure that the repayments are affordable.
Pros & Cons of Cash Loans for Unemployed People & Low Income Families
When budgeting loans from the social fund have been refused, you’re still going to need to borrow the money from somewhere. If you’re out of work or have a bad credit history, you’ll have already discovered that you aren’t going to get any help from your local bank. You represent too high a risk.
Interest rates are usury because most customers have very bad credit and have been rejected elsewhere. The cost of borrowing reflects the likelihood of default. You should never get a quick cash advance for frivolous purposes or when you’re unlikely to be in a position to repay the debt. They are not a long-term solution to your money worries.
The consequences of default vary, depending upon the nature of the credit agreement. If you default on a secured debt, you stand to lose your collateral. If your cash advance is unsecured, you run the risk of further interest and charges accruing. The debt will also be passed to a collection agency so it can be recovered.
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