Loans for unemployed benefits Vs. budgeting loans: which one is better?

Loans for unemployed benefits Vs. Budgeting loans Which one is better

Individuals in the early or elementary unemployment stage apply for governmental benefits. The benefits for the unemployed help individuals meet their minimal survival needs.

One of these benefits accounts for the Jobseeker Allowance. It is a benefit that government provides to individuals searching for a job who lack full-time employment and share the potential and ability to work. There are 2 types of Jobseeker allowance you can qualify for:

  • Income-based
  • Contribution-based

If you have made contributions as Class 1 National Insurance in the past 2 years, you may qualify for a new Job seeker allowance.

How much can you get in jobseeker allowance?

Individuals can claim only claim contributions based on JSA for 6 months. Post that, you would be eligible for only income-based JSA. Here are the income criteria for individuals applying for JSA.

  • 16-24- £57.90 (weekly)
  • 25 and above- £73.10 (weekly)

Though these weekly expenses help keep your neck above the water while jobless, emergencies demand extra attention. What if you encounter a sudden short circuit while you are away for dressing? In this situation, paying for both situations may prove troublesome.

To counter emergency money, loans for the unemployed on benefits may help. In this, you can apply with the lenders like Easyadvanceloan, which accepts government benefits as repayment income proof. Under this, you may get up to £2500 for 3-12 months. You can choose the repayment as per your affordability and other liabilities.

It is lately equated to budgeting advance.

The primary confusion is- how these unemployed loans differ from budgeting advances.

Loans for unemployed and budgeting advance: 

Which is better? 

With so much hype around the budgeting advance, let’s explore it in detail simultaneously with loans for the unemployed on benefits.

Loans for unemployed on benefits Vs. Budgeting advance: definition 

Loans on benefits for the unemployed are for low-income individuals needing urgent money to cover an emergency expense. These are short-term and unsecured loans that we provide as per affordability. The interest rate depends on loan affordability.

Budgeting Advance:

These are ideal for expenses and planning big purchases. Sometimes, income does not suffice the near or upcoming expenses. These are interest-free loans that the unemployed on benefits can borrow. Under this, you could get £100-£1500.

Loans for unemployed on Benefits Vs. Budgeting Advance: uses 

These loans differ in uses:

Loans for people on benefits – Uses

  • Paying rent
  • School fee
  • Subscription fee
  • Attend medical emergency
  • Car Repair
  • Stationary expenses
  • Food

Budgeting Advance uses: 

It is primarily apt for near-future purchases:

  • Purchasing furniture
  • Clothing
  • Footwear
  • Household or business equipment
  • Managing Hire purchase payments
  • Money for starting a new job
  • Technical and security update

Loans for unemployed on Benefits Vs. Budgeting Advance: Eligibility

Loans for people on benefits

  • UK citizens above 18 years
  • Identity proof
  • Unemployed benefits income receipt as a proof
  • Facing unemployment due to genuine reasons
  • Could afford monthly repayments and interest

Budgeting Advance eligibility

The qualification criteria differ here. Budgeting advances are available if you qualify the following parameters:

  • Income help
  • Pension help
  • Income-based-Jobseeker Allowance
  • Income-related Allowance

Apart from this, you must meet the below criteria :

  • If you are leveraging the benefit for 6 months/26 weeks, you may qualify.
  • The payment gap must be less than 28 days.

Loans for people on Benefits Vs. Budgeting Advance: Credit Criteria

The eligibility criteria differ in both cases. Let’s analyze:

Loans for people on benefits: 

As mentioned above, individuals may get up to £2500 on loans for people on benefits. Though, the amount you will get may vary as per standards:

  • The total monthly income you earn
  • Total earning members in the family
  • Dependents in the family
  • Urgency and the validity of the requirement

You can get the sum the same day you apply if your total monthly income is below 1300.

Individuals aged 18-75 can apply for the loan.

Budgeting Loans credit Criteria:

The below parameters help decide the total amount that you might be eligible for:

  • The total money you owe to Social Fund or previous loans
  • The total house members
  • The ability to repay the loan
  • Total savings (If you or your partner have savings above £2000/ month, you may not get the loan.) Another condition for loan rejection is age.
  • If your age exceeds 63 years, you may not qualify.

There is no serious health history of you and your family members.

The criteria further narrow down:

The minimum amount to borrow under this facility is £100. While it is the minimum limit, you may get more. Here is the distinguished demography:

  • Single individuals- £384
  • The couple- £484
  • Couple with Children- £812

Unlike unemployment benefits, these loans do not prioritize income but the budget you save in a month.

Loans for people on Benefits Vs. Budgeting Advance: Loan approval time

A major difference makes loans for unemployed on benefits a better choice than budgeting loans. Check this out:

Unemployed loans on benefits:

As these are emergency loans, the lenders quickly sanction the sum after screening the requirements. It is a same-day loan and takes 20 minutes to hit the accounts. The loan does not entail any long documentation.

Budgeting Loans 

The application process differs according to the pattern you apply for these loans:

  • If you apply through the post, it may take up to 31 working days for approval
  • If you apply through a text message, you may get it in 7 working days
  • In case you choose an online application, you can receive the funds in 25 days

When you need emergency help, budgeting loans may not be the best. Instead, loans to unemployed individuals on benefits may fit your needs well.

Bottom line 

Both budgeting loans and loans for the unemployed on benefits help the jobless individuals cater to different requirements in an unfortunate phase. Analyze both and the urgency of the situation before applying. In case of urgency and need amount quickly- apply for loans for unemployed on benefits with us hassle-free.

Also Read: Bank of England Raises Interest Rates to 1.75% for Managing inflation

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