Can I apply for a loan if I’m on benefits?
If your income includes benefits, finding a personal loan can feel difficult. Some lenders may focus heavily on employment status, a single score or automated rules.
At 118 118 Money, we’re a direct lender and we look beyond just one part of your situation. If you pass our credit and affordability checks and the repayments are manageable, you may be eligible for a loan.
If you’re not sure where you stand, start with our eligibility check. It lets you see whether you are likely to be accepted before you apply, and it won’t affect your credit score.
If you are out of work as well as receiving benefits, read our loans for unemployed people guide for a more specific look at income and affordability checks.
How the affordability check works (in plain English)
Affordability is about whether the monthly repayments are manageable. As part of the process, we’ll assess your income and outgoings to help make sure the loan is right for you.
This matters especially if your income varies, or if you’re balancing priority bills alongside everyday costs.
Check lower-cost help first
A loan is a commitment, so it is worth checking whether benefit-based support could be available before paying interest on credit. If you receive Universal Credit, you may be able to look at a Budgeting Advance for certain one-off costs.
For independent guidance, you can review GOV.UK guidance on Budgeting Advances or use MoneyHelper’s borrowing guidance before deciding whether a personal loan is right for you.
What can impact eligibility when you have bad credit?
Bad credit can mean different things. It might be caused by missed payments, defaults, CCJs, using a lot of available credit, or having a limited credit history.
Every application is assessed individually. If accepted, keeping up with repayments can demonstrate positive repayment behaviour over time.
