In New Zealand, beneficiary loans are available to people who receive government benefits. These include public support programs like Job Seeker Support, Disability Allowance, Sole Parent Support, NZ Superannuation and Working for Families.
Beneficiary loans are usually a short-term loan, and are intended for those who depend on their benefit income as their main source of income. Having a bad credit score can make it difficult to secure these loans.
Getting a loan with a bad credit score
Fortunately, there are still options to get a loan when your credit record isn’t so good. It pays to shop around and see what lenders are willing to offer you, especially if you’re currently unemployed or in part-time work.
Generally speaking, the most affordable way to get a loan is through your bank. If your bank is a reputable lender, it will have a better understanding of your spending habits and will be more likely to lend you money without too much hassle.
Another option is to ask a friend or relative for a cash loan. This can be a more affordable option than payday lenders, and it’s often the better solution for those with a bad credit score.
There are also a number of independent finance brokers who can help beneficiaries procure loans even with a bad credit record. These financial specialists search for a good loan deal on behalf of the borrower, and provide them with the money they need at reasonable interest rates.
Lenders that offer loans to beneficiaries
There are a number of lenders that offer beneficiary loans. They can be useful for people who have received an inheritance but may be struggling to keep up with their expenses or pay for medical treatment.
One of the most popular types of beneficiary loans is a short-term loan that allows you to borrow money against your inheritance. This can be particularly helpful for families who are facing estate tax obligations.
However, these loans are generally expensive and come with a high interest rate that can quickly add up. This is why it is best to avoid them if possible.
Fortunately, there are several online networks that arrange payday or personal loans to beneficiaries with bad credit. They typically connect borrowers with direct lenders that can fund loans in as little as one business day.
How to get a loan with a bad credit score
If you have bad credit, getting a loan can be a struggle. It’s a frustrating thing to experience, especially when you need cash to pay for an unexpected expense or make a big-ticket purchase.
Fortunately, there are some lenders who will help you get a loan even with bad credit. If you’re in need of money, though, it’s important to shop around and find the right lender for your situation.
It’s also a good idea to avoid payday loans if possible, as they can trap you in a debt cycle with sky-high interest rates and fees.
Alternatively, you can use a finance broker like Link Finance to procure the loan you need. These independent finance experts will search for a loan deal that’s appropriate for your needs and budget.
Alternative loaning options
There are a variety of alternative loaning options available to beneficiaries with bad credit, and the best option will depend on your financial situation. Some options include equity financing, grants and subsidies, crowdfunding and personal savings.
There’s also non-bank lending, which is a type of alternative loan that is offered by companies outside the traditional banking sector. These companies may have a wider range of loan products and are more flexible than banks.
Some New Zealanders with low deposits or poor credit ratings may find it difficult to secure a home loan through a bank, so they turn to non-bank lenders. These companies have a wide range of loans to choose from and are generally more willing to take on borrowers with bad credit.
A growing non-bank lending sector will bring New Zealand into line with global finance markets and will benefit the economy in the long term. It will also help to drive inclusion, increase choice and competition.