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It is possible that you can be eligible for a secured loan if you are receiving benefits, as some lenders are willing to let you declare some of them as income.
The tricky part can be knowing which ones will be accepted and the types of deals that will be open to you based on your circumstances.
Here’s what you need to know about using benefits as income when applying for a secured loan.
If you are receiving benefits – such as disability benefits or unemployment benefits – and this is your only form of income, there are specialist lenders that will allow you to apply.
The key to a successful secured loan application often comes down to your affordability, so these lenders will want to ensure that it will not be too much of a financial burden for you to take on.
Before you apply, it may be a good idea to get in touch with the Willows team who can answer your questions about eligibility and give you more guidance about secured loan affordability.
Carer’s Allowance is accepted by most lenders as a form of income, so you can use this for your affordability assessment.
As is the case with all forms of income, the lender will want to see some kind of relevant documentation so it can be cross-referenced and confirmed.
If you’re not sure what type of information you need to provide, our team of friendly advisors are available to answer any questions you may have about using carer’s allowance and any other form of benefit as income.
If you are currently receiving Personal Independence Payment Benefit (PIP), this can be reviewed as part of your affordability assessment along with any other relevant income.
The lender will explain what kind of documents they need to see to confirm your current PIP status, which you can then submit for review.
Adding Disability Living Allowance for your affordability assessment shouldn’t cause any issues for most lenders.
If you include it as part of your overall income, they usually want to check the period it has been awarded for, so will ask you to submit any relevant documents.
Universal Credit has replaced Housing Benefit for most new claimants, so while you cannot reference Housing Benefit as a specific form of income, there are some instances where Universal Credit can be accepted.
If you need more insight, we’d be happy to talk through your options based on the benefits and income you receive to give you a better idea of your eligibility.
Lenders generally try to be as flexible as possible when it comes to accepting different forms of income, which includes assessing Job Seeker’s Allowance and Employment and Support Allowance benefits.
Some lenders are happy to accept these types of benefits on their own, while there may be additional criteria applied by others.
This is usually determined by the number of applicants involved and their employment status – we can give you more clarity about how this applies to you when you get in touch.
Income Support is accepted by most lenders, although most people who have migrated away from this benefit are using Universal Credit instead.
This is because the Department for Work & Pensions has asked existing income support claimants to switch to Universal Credit and are no longer accepting new claims for this benefit.
So, whether you are receiving Income Support or Universal Credit, you can include it as part of your monthly income.
To get a better understanding of your eligibility, you may find it helpful to speak with us about your situation, as this can make it easier to find a suitable lender.
Getting a quote won’t affect your credit score
You can include Industrial Injuries Disability Benefit in the income section of your secured loan application as lenders will accept it.
The lender will likely ask you to provide proof of your claim that is dated within a certain timeframe, along with one or two other additional documents, but this will all be explained at the start of the process.
You can include income received from Working Tax Credits so it can be reviewed in your affordability assessment.
However, this only applies to existing claimants of the benefit, as it is being replaced by Universal Credit in 2025, so new claims are no longer being accepted.
Please see above for more information about using Universal Credit as income.
Widowed Parent’s Allowance is accepted as a form of income by secured loan providers. However, since it became Bereavement Support Payment, most people do not have access to this type of benefit.
If you are still receiving Widowed Parent’s Allowance and want to include it, lenders will ask you to provide an award statement and other related documentation so they can ensure you are eligible for the loan.
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We’re extremely proud to be rated ‘Excellent’ for our service standards. We’ve helped thousands of customers across the UK over the last 15 years to find the right finance for their needs – no matter how complicated the circumstances. And we look forward to helping you.
If you claim a benefit and are not sure if you can use it as income for a secured loan, we can offer expert advice, so you know exactly where you stand.
Our friendly team of brokers are on hand to answer any questions you have about benefit income and secured loans. You can get in touch with them today by calling 01656 766 158 and they’ll be more than happy to help.
If you have a question – we’d be happy to talk to you – simply call us…
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Your home may be repossessed if you do not keep up repayments on a mortgage or other loan secured on it.
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Brocastle, Bridgend, CF35 5AS
Tel: 01656 766158
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