Compare loans for people on disability-related financial support

Which disability benefits count as income?

This depends on the lender, but in general, you can expect the following benefits to be accepted:

• Personal Independence Payment (PIP)
• Disability Living Allowance
• Universal Credit
• Incapacity benefit
• Employment and Support Allowance
• Industrial Injuries Disablement Benefit

Things to consider before getting a loan

Before going for a loan, consider whether it’s actually the smartest choice for your finances. Try thinking about:

1. What you need the money for. In some cases (for example, if you need to buy a car or to adapt your home to make it accessible), you may be entitled to some extra help from a government scheme. Make sure you check that out before taking out a loan. Moreover, if you need money to pay off your monthly bills or some other regular expense, taking out a loan will only worsen your problem instead of making it better. Loans are generally a good idea for big or unexpected expenses, but they can’t help you with your day-to-day spending.
2. How long you need it for. Standard personal loans are meant for borrowing money in the medium or long term, whereas if you only need some flexibility with your monthly payments, you may be better off with a credit card.
3. Can you afford to borrow money? Loans are never free, so first and foremost, you should consider them a cost. If you aren’t sure whether you can meet the monthly repayments, you may want to look at possible alternatives.
4. Can you settle things differently? If you’re looking at borrowing money because you’re already in debt (for example, you’re behind with the bills), see if you can get in touch with the company you owe money to and agree on a repayment plan first.

What are my credit options if I’m on low income or have bad credit?

Compare different financial products before applying to make sure you get something that works well for you. You may want to consider one of the following:

• Government schemes. There are different options available. For example, if you’re on benefits, you may be eligible for a budgeting loan. This can be used to cover a range of expenses, and it’s interest-free, so you’ll only have to pay back what you borrow.
• Credit unions. Credit unions are not-for-profit cooperatives that lend money to members in financial difficulties at a low interest rate. They’re funded through other members’ savings. Since they aren’t about making money, they can usually offer you a better deal than traditional lenders.
• Guarantor loans. If you have someone (usually a family member) who can guarantee to make your repayments if you can’t, you may be able to access credit through a guarantor lender. However, interest rates can be high compared to traditional bank loans.
• Credit-builder credit cards. If your credit score isn’t great, these are generally a good idea because they can be used to improve it. They have loose eligibility criteria but normally a high APR, so they’re no good for borrowing money in the long term. You should only use them to spread out your expenses within the billing cycle and clear your balance in full every month every time you can.
• Specialist lenders. Some lenders specialise in offering credit to people with low income and a poor credit score. They can be a solution, but you should be careful because they may offer sky-high interest rates that won’t help you solve your money problems.

Regardless of what option you choose, you should always make sure that you can afford to repay what you borrow. If you fall behind on your payments, you can damage your credit score further, which will make it even more difficult to get a loan in the future.