Are you a beneficiary who needs a loan? While other financial institutions reject child support, freelance income, or benefits as verifiable income sources, there are lenders that approve loan applications coming from a beneficiary. Beneficiaries may be eligible for loans as long as they can demonstrate that they receive a regular form of income to be able to make the repayments. Even if the borrower is unemployed, he has a chance to be given access to funds.
Are beneficiary loans risky?
Beneficiary (short-term) loans tend to receive a lot of negative opinion. This is primarily based on inaccurate idea about the way they work. Lenders are legally obligated to ensure the credit they offer is suitable for the borrower’s financial and personal situation.
In some cases, beneficiary loans can actually be a cheaper form of borrowing. The dollar amount of interest paid is actually going to be low because these loans are paid within a few weeks, while annualised interest rates are certainly high when compared to other loans. The short-term nature of beneficiary loans makes them low-risk as they have a short lifespan and are not subject to market forces.
When to get a beneficiary loan?
While this loan is fairly easy to access, a beneficiary loan is not something you should rush into or acquire for unnecessary use. These loans are more appropriate in dire times or emergencies where you simply don’t have access to money. These type of loans allow borrowers to address immediate financial issues like unexpected utility bills, medical expenses, repair work, and special occasions.
Many lenders approve loan applications without asking the borrower what it will be used for. Others prohibit borrowers from using funds for things like business expenses or secondary education, etc. It is wise to find out lenders’ policies before applying.
Loans come in various forms, so you better consider all the available options. You can declare an asset (property or liquid) as security to reduce the loan cost. However, those assets can be repossessed if you become unable to make payments. You can minimise risk with an unsecured loan, if this is your preference. With unsecured loans, your assets will be safe regardless of whatever happens.
Make sure to explore alternative options before making an agreement and signing any documents. Take the time to ensure you understand the terms and conditions of your loan and the risks associated with defaulting on a payment.
You need to ask yourself, “Can I afford to make the repayments on the stated date?”. Loans turn sour when people take them out irresponsibly. If you do this, you could end up with a large fine to pay, and it will definitely show up on your credit rating. Missed payments show for 6 years.
How to apply for a beneficiary Loan?
To apply for a beneficiary loan you need to be over 18 years old, be able to produce your latest 3-month bank statements, provide identification, and proof of billing, which can be used to verify your current home address.
The great thing about beneficiary loans is that the approval process is based on repayment ability over a short period. The money used to pay off the loan can come from various sources — ranging from a job to a pension fund. Obviously, you have to double check the details of your application before submitting it. A small error can disqualify you unnecessarily.How To Get A Loan If I Am On Benefits? Click To Tweet
Regardless of whether you are unemployed, have a bad credit history, or rely on income from a job, you may be able to access a beneficiary loan as long as you can meet your financial obligations. Every lender has a minimum requirement and some focus primarily on income. Your income may be the single most important factor in determining whether you will get approved for the loan. Many lenders also factor in how much debt you have compared to your income. This is known as the debt to income ratio and the percentage required for approval can vary from lender to lender.
Pretty Penny Loans is a responsible provider of beneficiary loans in New Zealand. PPL is the trusted name kiwis turn to by upholding values of complete transparency. If you are ready to take the next step, apply here.