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If you’re unemployed due to a disability, you still need to face challenges that regular people deal with. In addition, you also worry about being qualified for a loan or not. The good news is that there are loan options available to provide assistance when you’re having financial difficulties. The bad news, however, is that it has several consequences that may aggravate the problem. This article will shed light on the different options for loans for people on benefits and the drawbacks that they should consider.
Commercial financial institutions, such as banks, provide a so-called “access loans” to help people with disabilities. The money can be used to purchase equipment that will cater to their special needs, such as a vehicle, specially designed showers, stair lifts, or toilets. The amount is big enough, therefore, the credit score is an important issue. Those who have a bad credit remark are likely declined while those who have a higher credit rating have a higher chance of approval.
Employed individuals are the ones usually granted with this loan, however, persons with disabilities (PWD) may also qualify. Lenders are prohibited to restrict you from borrowing money just because of your disability, however, you should be able to provide proof that you can settle the loan without any difficulty.
One way of earning money when unemployed is by having a small business. When you’re not capable of procuring traditional jobs, you may apply for a loan and establish a small business. There are different departments that you can approach when you want to sustain yourself through entrepreneurship.
What Loans To Avoid
While all loan options do not come free of charge, there are lenders that you should get rid off because of the expensive interest rates they apply. Pay weekly loans on benefits and payday loan, for instance, are two loans that promise fast cash. These lenders usually claim 100% approval to entice customers and although they provide money, the interest rate they charge is just too high. Sadly, those who are having a hard time applying for a loan may consider them because they accept almost anyone, even those who are on benefits and need a loan fast. In fact, the lender sometimes favour people on benefits even more because of the regular welfare income they receive.
Borrowers may satisfy their financial concern temporarily but it won’t be long until they realize that they have to repay a huge loan amount, which is consist of the principal loan and the interest. Because of the costly rates, borrowers have difficulties repaying the loan, thus, leading them to delayed payments. As a result, the loan is either extended or charged with a new set of fees aside from the original loan amount. This is what traps people in the cycle of debt; therefore, it is important to consider your loan options before you apply. Secured loans and loans from the government are usually cheaper so it’s best to take note of these alternatives first. Moreover, double check the lender if they are legitimate to avoid being scammed.
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