Sometimes life and work are disappointing. It may happen that you temporarily have no work or other income. This sometimes happens during normal life. Then daily necessities such as gas, water and light become an obstacle: you cannot live an ordinary life if you cannot pay the bills.
The causes of lost income are varied: Your employer may have gone bankrupt, a difficult situation such as a divorce or depression. In such a loss you can lose your income.
Lack of money can cause a negative spiral, in which fines and arrears accumulate. Family and friends can lose confidence in your ability to solve the problem. Therefore, strive to get out of this situation as quickly as possible. Take daily action to get money back in your hands: search for a new source of income, and arrange a loan to pay the current bills.
If you have no income, your first priority is to put money in the bank to pay the bills.
A credit is the fastest way to prevent the downward spiral of payment arrears. But that is a challenge, because most lenders lend you money on the basis of a fixed income. Your options for borrowing money without income are limited.
You don’t just borrow money with benefits. People who depend on benefits do not have it wide. They cannot just afford the extra monthly charges. If you have a benefit, then you are very careful with the monthly payments that you have to make, such as rent, food, gas and electricity, etc. Therefore, think carefully before you start borrowing with a benefit. Request multiple quotes and compare the costs and conditions. This way you can save money on the costs of your loan.
Repaying a loan increases your monthly costs. The payment terms are debited from your account, so that in the future you have less money to spend each month. That is why borrowing with benefits is a step that you only take if you really have to. It is a last resort.
First look at your alternatives to borrow money. Go to the employment agency, ask friends or family if you can do extra work, or do volunteer work for which you receive a small amount. Do you have items that you can sell? At Fye Saler Salon we have extensive information about generating income.
Think of selling household goods, clothing or DVDs that you no longer use. If you can sell it via Marktplaats or eBay then at least you have some money for the coming month.
Borrow with a benefit for unexpected situations
People on benefits have to live on a lower income. Your benefit is often not sufficient in unexpected situations. Most benefit recipients have little savings. That is why it is difficult to solve a problem if it costs money. Here are a few examples of unexpected events:
- The sewer or rain gutter is leaking. The plumber has to come by to make it.
- Your fridge will break. You have to have it made or buy a new fridge.
- Your car breaks down. The repair is more expensive than you expected.
- You get sick unexpectedly and you have to pay the doctor’s or hospital’s bill.
Those who depend on a benefit can think ahead wisely and put aside some savings. You can reserve an amount for this each month. You then park that money securely in a savings account, so that you cannot just spend it. Then you can pay the bill if you have such an unexpected problem. But it may happen that you have another problem soon afterwards. What are you doing then? Not everyone has enough savings for unexpected expenses. If you depend on a benefit and you have no savings, where do you get the money from? You can ask for help from family or friends but that is not always possible. Some are too proud for that. But you still have to solve your problem and pay the bill. You need the money now. Your unexpected problem forces you to borrow with a benefit.
Banks and other lenders understand that people on benefits have little to spend. If you have to live on a low monthly amount, it is difficult to repay a loan. That is why banks are careful about providing loans to people on benefits.
Which Benefit Do You Receive?
Banks and other lenders look at your payment to determine whether you can repay a loan. You receive your benefit for a reason that influences your future monthly payments.
People with a long-term benefit are more likely to be accepted for a loan. That is because their income is predictable. This way a bank or lender can easily determine how much you can repay per month. For example, you can get a small loan of a few hundred euros because the monthly costs are low. The exact amount that you can borrow depends mainly on the amount of your benefit.
Borrow money with a WIA benefit
If you receive a WIA benefit because you are (partially) unfit for work, the bank will give you a loan less quickly. They see that the chance is smaller that you will start working again in the future. Then you remain dependent on a disability benefit and your income will not grow. You therefore have less room for repaying the loan.
You can see what kind of WIA benefit you have on the UWV website. Lenders need this information when you request a quote.
Borrow money with a WAO benefit
You will receive the WAO benefit in the event of incapacity for work if you became ill before 1 January 2004. This law has now been replaced by the WIA.
Borrow money with a Wajong benefit
Most people who receive a Wajong benefit have a fixed income. The amount of your income is predictable. Lenders can trust that you can make monthly repayments. That is why they will probably be able to give you a loan.
You can list your income and expenses and you can see how many euros you can repay per month. That determines how much money you can borrow with a Wajong benefit.
Borrow money with unemployment benefits
If you have unemployment benefits, then you are not in work. Your monthly income is now low and unemployment benefits are temporary. That makes it difficult for the lender to estimate when you return to work. That makes it risky for them to give you a loan.
You have a chance to borrow money with unemployment benefits if the duration of the loan is shorter than the duration of your unemployment benefit. You may then be qualified for a small loan.
Some of the lenders will not lend you money with unemployment benefits. They refuse any claimant on unemployment benefits because they do not know how high your income will be when your unemployment benefit ends. But another part of the banks and lenders are considering it. You still have to meet certain requirements, for example that your partner has an income.
Some lenders do not do an income check. You can also borrow money from them without a BKR check. You can then take out a short-term loan. This is also called a mini loan or mini credit. They accept every applicant with unemployment benefits but they have less favorable conditions. They will lend you money with unemployment benefits if higher risk is covered by higher interest. But you get a high fine if you miss a payment. Therefore, be careful with a loan without a BKR check: read the fine print.
You will receive unemployment benefits, which means that you will not know when you will be doing paid work again. Unemployment benefit is temporary and will expire after a few months to years. If you still have no paid work before that time, you can apply for a WIA or social assistance benefit. Lenders know that WIA or assistance recipients are unlikely to be able to repay a loan. That is why they will try to estimate whether you will return to work in the future.
Prepare well when applying for a loan with unemployment benefits. Gain insight into your financial situation and calculate how much you can repay per month.
Borrow money with social assistance benefits (WWB)
A social assistance benefit is enough for a minimum income. This means that your income is rarely higher than your fixed monthly payments. You do not have enough to repay a loan. That is why lenders will not lend you money if you receive social assistance benefits.
Applying for a loan with social assistance benefit is only possible at the Town Credit Bank. A family on social assistance benefit (WWB) is usually unable to afford the extra monthly costs of a loan. Therefore, regular lenders will reject the loan application. If you need money urgently, but you are dependent on social assistance benefits, you should better apply for the Special Assistance: This is a loan that is provided by the Town Credit Bank, which is arranged by the municipality just like the Assistance. The municipality guarantees the loan.
If you have a social assistance benefit and you need extra money, you can also look at ways to earn extra. Every person has talents that can help others. With time and effort you can make the difference for a customer and be back to work in no time.
Mortgage with Benefit
Those who depend on a benefit often have difficulty getting a mortgage. Owning a home can be beneficial if you do not expect to move. But a low income is an obstacle to getting a mortgage: With a benefit, you can offer the mortgage lender little certainty that you can pay the monthly mortgage payments. A benefit in itself is not enough to give it the certainty they require.
The stability that a mortgage lender is looking for can come from a permanent employment contract, such as that of your partner. The only types of benefits with which you can qualify for a mortgage are a WIA benefit and ANW benefit.
Mortgage with Benefit: WIA and ANW
Anyone who receives a WIA benefit due to incapacity for work, without having any prospect of improvement, can regard the benefit as permanent. The benefits agency, the UWV, will continue to provide you with this benefit for as long as the Work and Income according to Labor Capacity Act continues to exist. For a mortgage provider, that is just as stable as having a fixed salary. That is why, as a permanently disabled person, you have a chance of getting a mortgage with a benefit.
ANW benefits can sometimes be accepted as a fixed income by mortgage lenders. The ANW benefit is for a widow or widower who meets the conditions. This benefit is permanent and gives the recipient a fixed income. This gives you the chance that you can apply for a mortgage with payment.
With the WIA benefit and ANW benefit you have a chance of getting a mortgage with benefit. But the other payments are regarded by the mortgage lenders as an unstable income by default. They will not grant you a mortgage on the basis of such a benefit.
Living situation and Borrowing
The bank or lender also looks at your living situation. Your ability to repay a loan also depends on your partner’s income. A partner who works gives the household enough income for the extra monthly costs. That is why banks and lenders will more easily borrow money if you have a partner who works. They then have the assurance that your household has enough income to repay the loan.