Low Income Loans

Whether it’s a packed-up car, a broken boiler, or an unexpected bill, financial emergencies can happen to anyone at any time.
If you’re on a low income, you might worry about how you’ll afford an unplanned expense.

Can you get a loan if you have a low income? You should carefully go through your income and outgoings first: you can find out more about how to budget in our guide.

Little Loans explains the options that may be available to you if you need to cover a financial emergency on a low income.

Loans for people on benefits: interest-free government loans

If you claim certain benefits, you could get a government loan to help you cover an emergency expense.

• Budgeting Loan
  To be considered for a Budgeting Loan, you’ll need to have been getting certain benefits for at least 6 months. You won’t be charged interest, and your repayments will be automatically taken from your benefits. The amount of money you could borrow depends on your circumstances.


• Budgeting Advance
  If you get Universal Credit or certain other benefits, you could get a Budgeting Advance. With a Budgeting Advance, you could borrow up to £348 if you’re single, up to £464 if you’re in a couple, or up to £812 if you have children. Your repayments will be deducted from your Universal Credit payments, typically over 24 months.

If you’re on a low income, adding a monthly loan repayment to your outgoings might not be the right decision for you. If you’d like to talk over any money worries you’re having, please get in touch with StepChange, MoneyHelper, Citizens Advice, and National Debtline.

Low-income loans: could I get a loan if I have a low income?

You might be eligible for a loan with a low income, but this depends on the lender you apply to.
As part of their eligibility criteria, some lenders need you to earn a certain amount of money each month.

When you take out a loan, you’ll pay the money back in equal instalments, including interest. To be eligible for a loan, you’ll need to show the lender that you can afford to make your monthly repayments.

Important: before you search for a loan, you should be sure that you can afford to make your repayments on time and in full every month. You should be able to do this without it affecting your ability to cover your essential costs, such as rent or mortgage, household bills, and food.

No-income loans: could I get a loan if I have no income?

It’s not possible to get a loan with no income.
This is because lenders need to feel confident that you will be able to make your monthly repayments.

Can I get a loan if I’m unemployed?

You may be eligible for a loan for unemployed people, but to be considered, you will need to show you have a regular source of income, such as certain benefits.
You can find out more about loans for unemployed people in our guide.

Low-income loans for bad credit

Are you thinking of searching for a bad-credit low-income loan?
It’s important to be aware that a bad-credit loan may carry a higher interest rate. The higher the interest rate, the more the loan will cost you. This might not be the right choice for you right now.
You may be able to get a bad credit loan if you're on a low income, but you should consider how making your repayments could affect your finances.

Low-income loans guaranteed acceptance

No loan comes with guaranteed acceptance, regardless of your income.
When you apply for a loan, the lender will run a full credit check, known as a ‘creditworthiness assessment’. This gives them a good idea of your credit score and history, as well as your recent financial habits. This information will help them work out whether you can afford to pay back the money.

Do benefits count towards income when applying for a loan?

Some lenders may count certain long-standing benefits as income; however, this depends on the lender.

If you’d like to find out more about loans for people on benefits, our guide could help.
You might also find it useful to browse through the following guides:

• Check your benefits eligibility: what benefits could I get?
• What benefits are available for single people in the UK?

Which benefits count towards income?

The benefits that could count as income will depend on the lender. Generally, longer-standing benefits are more likely to be considered, but again, it’s important to remember that not every lender will accept applications from people on benefits.

Benefits that some lenders could consider a form of income include:

• Universal Credit
• Personal Independence Allowance (PIP)
• Working Tax Credit
• Child Benefit
• Child Tax Credit

Could I get a low-income loan with Little Loans?

Little Loans is a credit broker. We work with a panel of over 30 direct lenders who offer short-term, personal loans between £100 and £10,000.
To use Little Loans’ credit broking service, you’ll need to have a regular source of income paid into your bank account. Please note that some of the lenders on our panel are willing to consider applications from people receiving certain benefits.

As well as having a regular source of income paid into your bank account, you must also:

• Be over the age of 18
• Be a UK resident
• Have a UK bank account and a valid debit card.

Meeting these criteria does not guarantee that you will be matched with a loan.

Important: there are no income requirements to search for a loan with Little Loans, but please be aware that some of the lenders we work with may have minimum income criteria.

How to search for a loan for people with low income with Little Loans

Again, please think very carefully before you apply for a loan on a low income. Take the time to work out how your repayments will affect your monthly budget.

1. Tell us how much money you need to borrow and how long you’d like to borrow it for.


2. Fill out our simple online form – this should take no longer than five minutes.


3. Little Loans will complete a soft credit check and scan our panel of lenders for a loan that could be suitable for you. Searching for a loan with Little Loans will not harm your credit score.*


4. In just 60 seconds, we’ll let you know whether you’ve been matched with a loan. If a suitable loan has been found, you’ll be redirected to the lender’s website.


5. If you’d like to make a full application, the lender will run a creditworthiness assessment and reveal whether you’ve been approved.

If approved for a loan, your money could be sent the same day.**

What happens if I miss a loan repayment?

If you miss a loan repayment, your lender may charge you a late repayment fee, and your credit score could decline.

If you’re finding it difficult to make your monthly repayments, please speak to your lender as soon as you can. They will help you work out your next steps and may be able to suggest things to help reduce the pressure you’re facing.

Where to get free financial advice

If you’d like to talk to someone about money worries, please know that you can get free, confidential, impartial advice in the UK from the following organisations: StepChange, MoneyHelper, Citizens Advice, and National Debtline.

*Little Loans uses soft search technology with no impact on your credit score. If you’re matched with a loan and choose to make a full application with the lender, they will run a creditworthiness assessment, which will include a hard search and/or an Open Banking check. Please note that a hard search will remain on your credit file for up to 12 months, and multiple hard searches within a short space of time will damage your credit score.

**Payout times vary between lenders. The time it takes for the money to appear in your account will depend on your bank’s policies and procedures.