Loan on benefits

1985c

Hi all
Question.....I have been approved for a £10,600 loan to consolidate my debts. I’m trying hard to clear all my debt as I feel trapped in my credit card repayments.
Would getting this amount affect any benefits I have? As soon as the money is paid into my account I will be paying off the credit cards so therefore no money will be left as “savings”
Please help! I just want to sort out my debt but as a low earner I rely on my benefits.
Thanks in advance.

foxy-stoat

What is the interest rate on the new loan?

Do you do not earn in excess of £20,000 then do yourself a favour and dont take it out.....its not a guarantor loan is it?

1985c

Hi. Thanks for your reply. It isn’t a guarantor loan and I don’t earn over £20,000.
I would just like to know if it would affect my benefits and look like an income when it will go straight out of my account.

foxy-stoat

Do you submit all of your bank statements to the council?

If not then they wont find out.

You probably shouldnt be taking on the loan, the lender also probably shouldnt be lending it to you.....but wish you all the best.

enthusiasticsaver

I don't see why it would affect your benefits as they technically won't be savings. If the DSS ask to see statements there might be questions.

However, debt consolidation rarely works when it comes to unmanageable debt. People think that by having one large repayment usually over a long period of time instead of lots of credit card and loan repayments that they are somehow making it easier to sort their debts out. In reality it is usually more expensive as you undoubtedly won't get a good interest rate if you are a low earner and are over committed and you will be paying it back over a longer period of time. It does not usually lead to decreased debt as over time anyone in debt who has a habit of reaching for credit cards when they can't afford to pay for something will do so again so the credit card debt will build up again and they still have the debt consolidation loan.

If you do it you should change the way you deal with your finances. Get rid of the credit cards so you are not tempted to use them again and learn to live within your budget by economising or taking on extra work.

Idea.ly you would learn to budget and focus on paying off the credit cards starting with the most expensive. Move any to 0% deals if you can. If you really cannot afford to pay them off look at a DMP to get interest frozen.

jonesMUFCforever

There is something very suspicious here - if the OP had told the lender that they were on benefits then they would not have got the loan - end of.

How does shifting one debt to another -untrap someone from debt?

OP is this loan from a high street bank or a loan shark?

BrassicWoman

jonesMUFCforever wrote: »

There is something very suspicious here - if the OP had told the lender that they were on benefits then they would not have got the loan - end of.

How does shifting one debt to another -untrap someone from debt?

OP is this loan from a high street bank or a loan shark?

Not all benefits are unemployment benefits.

System

jonesMUFCforever wrote: »

There is something very suspicious here - if the OP had told the lender that they were on benefits then they would not have got the loan - end of.

Utter rubbish. Millions of people get tax credits of some sort which are benefits and they get loans. Benefits =/= unemployed.

Never astounds me how both ignorant and usually wrong those who finish a statement with "end of" are. I can't recall the last time I saw a statement which was followed by "end of" which was nothing but absolute unadulterated rubbish.

Sncjw

You do realise consolidation loans are effectively doubling your debt. There’s no garuntee you will pay them off.

What is your income and plus benefits

1985c

I would like to thank the people on here that have offered me advice & support.
As for some, let me inform you, I am a single mum through no fault of my own and I work to support myself and my child. However, I rely on the benefits to help me make up my income as I have no other support network.
As for the lender they are not a loan shark or dodgy bank but a very well known highstreet lender and know all of my situation. Not that that should matter as I wasn’t asking on advice on where to go. I was simply asking if anyone knew if I would be penalised for trying to sort out my debt and run the risk of losing my benefits.
I haven’t spent money without thinking of the consequences. I am simply trying to sort my debt out to make a better future for me and my family.

DCFC79

1985c wrote: »

I would like to thank the people on here that have offered me advice & support.
As for some, let me inform you, I am a single mum through no fault of my own and I work to support myself and my child. However, I rely on the benefits to help me make up my income as I have no other support network.
As for the lender they are not a loan shark or dodgy bank but a very well known highstreet lender and know all of my situation. Not that that should matter as I wasn’t asking on advice on where to go. I was simply asking if anyone knew if I would be penalised for trying to sort out my debt and run the risk of losing my benefits.
I haven’t spent money without thinking of the consequences. I am simply trying to sort my debt out to make a better future for me and my family.

Nothing wrong with what your wanting to do as long as you use the money as you plan.