Despite the fact that loans for poor people are widely available, new government-funded loans have been introduced across the country to offer an “affordable” alternative for hard-up families. The UK government doesn’t want the poorest families to turn to unregulated loan sharks to borrow money.
The Daily Mail recently told of how a loan shark charged his customer £90,000 in interest payments to borrow a measly £500. She was “asked” to pay a staggering £1,840 a month and endured threats to her physical well-being. The stress of this led to her having two strokes and a brain haemorrhage.
Difficulty in Finding Cash Loans for Poor People with Bad Credit
The banks aren’t interested in offering loans for the unemployed, especially if the applicant has a history of bad credit. If you have missed payments on past credit agreements, your credit rating will be adversely affected for 6 years (in the UK). Borrowing money with poor credit is far more difficult.
Rather than borrowing money from a loan shark, customers are turning to pawn shops and payday lenders to get loans for people with bad credit. While the rate of interest is usury, they are regulated so they aren’t going to turn to violence and threats to recover their money.
Government-funded Loans for Low Income Families from myhomefinance.org.uk
The Department of Work and Pensions (DWP) secretary has launched a new scheme that offers loans for poor people. Subject to a face-to-face interview, you may be able to borrow up to £500 at a typical rate of 29.9% APR. This rate varies depending upon the amount borrowed and the loan duration. There’s also a one-off administrative fee for setting up the arrangement.
My Home Finance, a not-for-profit enterprise, has been set up in partnership with the DWP, National Housing Federation and the Royal Bank of Scotland. The intention of this partnership is to prevent financial exclusion. According to their website, “My Home Finance is a new high street service offering affordable loans, money advice, bank accounts and linked savings accounts.”
Applying for Bad Credit Cash Loans for Poor People
You can borrow money with bad credit for any purpose, including buying a new cooker, new school clothes or paying for Xmas. Provided that you’re over the age of 18, you’re able to apply. Just because you’re disabled, unemployed or are on benefits is no bar to getting acceptance.
A breakdown of your income and expenditure will be required. You should also bring along a copy of your bank statement and an additional source of address proof. Most people provide a utility bill, tenancy agreement or driving licence. Once agreed, your government-funded loan will be sent directly to your bank account. The repayments will be collected weekly or monthly by direct debit.