If you need to borrow money, there are plenty of options available to you—some better than others. To make sure you’re getting the best possible deal, it’s important to understand your budgeting loan options and how they work.
In addition to saving money on interest rates and fees, taking out multiple loans can help you address all your financial issues in one fell swoop. For more information about budgeting loans, keep reading below!
What is a Budgeting Loan?
A budgeting loan is really just another term for a payday loan. This type of short-term loan is designed to help borrowers with unexpected expenses. As such, these loans are generally only offered to borrowers who have verifiable incomes and stable employment histories.
If you meet these criteria, you should be able to get approved for more than one budgeting loan in a single year.
The maximum number of loans you can take out will be determined by your lender; however, most lenders limit their customers to taking out four or five loans per year (including rollovers). You can also get a DWP budgeting loan.
This limit is set because it helps prevent borrowers from becoming trapped by debt.
Why do you need them?
No matter how carefully you budget, some months will be better than others. In cases where your budgeted funds are insufficient to meet your obligations, it is helpful to take out budgeting loans, also called bridge loans or bridge financing.
How many of these loans can you get within a year without negatively affecting your credit score and your ability to qualify for other future borrowing needs (such as buying property or starting a business)?
The answer depends on several factors: what types of accounts you hold, how long you have held them and what type of trade line (or loan) you wish to apply for.
A quick review of all pertinent financial accounts might reveal more favorable options than those that appear at first glance.
How to apply for a budgeting loan?
If you’re thinking about applying for multiple budgeting loans, there are several factors to consider. With budgeting loans, it’s possible to have one loan due at a time, or to have multiple loans that are due at different times during your 12-month repayment period.
If you plan on having just one loan during your repayment period, try looking for lenders that offer low interest rates and fixed monthly payments.
This will help keep your costs down and make your monthly payments more manageable for you. In addition, if you do plan on having multiple budgeting loans at once, shop around for lenders that don’t charge fees for an additional loan.
Some lenders will charge if you take out another loan with them within two months of when your first loan is due.
What documents do you need to provide as proof of income, identity and residence?
When applying for a budgeting loan, you will be required to provide proof of income, identity and residence. Your application must contain at least two documents that support each category.
You need one document from each of these three categories: income (pay slips, employment contract etc.), identity (driver’s license, passport or credit card) and residence (utility bill or rental agreement).
If your current employer does not have payroll facilities yet, you can use an older pay slip showing your income for your last paid period.
If you don’t have any other bank accounts except for your student account which has overdraft protection facility attached to it ,you can provide its statements as proof of an active bank account.
The online application process, FAQs, tips and tricks
If you’re applying for your first universal credit budgeting loan, we get it. Applying for a loan can be intimidating and confusing. If you’re feeling like you don’t know what you’re doing, check out our application tips and steps to walk you through each part of the process.
We can help answer any questions that you may have so that everything goes smoothly when getting your loan online or at the DWP budgeting loan Centre.
Final notes about applications, payments and other important issues.
If you’re using an installment loan to meet your budgeting needs, make sure that it doesn’t create more financial woes for you. Avoid getting yourself into a position where you need to pay multiple loans at once – especially if that could negatively impact your day-to-day living expenses.
Pay attention to all of these important things when pursuing budgeting loans: how much they cost; what they are used for; whether or not there are any additional fees or costs involved and if so, how much they will be and when will they be due; and whether or not interest is assessed and what annual percentage rate (APR) it is. And as always, consider shopping around for different lending options before choosing one.
Budgeting Loan Number - Conclusion
Try and limit your number of budgeting loans to three or four at any one time. This helps you manage your money better, both now and in future years.
It’s best to put all your income towards paying off existing debt, so that you save as much interest as possible, while also helping you build up savings to avoid having to use loans again.
If you think another loan might be useful, make sure you’re aware of how it could affect your finances when deciding whether or not to take it out. A professional can help provide perspective on which option is right for you.