Loans and financial help for people on low incomes

Creditpauvre.com is an independent guide for people on low incomes: those claiming benefits, working part-time or zero-hours contracts, living on a small pension, bringing up children alone or studying on a tight budget. When a bill lands, the cooker breaks or the rent falls behind, the first question is not only "where can I borrow?" but "what help can I get before I take on debt?".

The site does not lend money, does not broker loans and does not pass your details to anyone. It explains what exists, what it costs and which traps to avoid. The main focus is the UK, with notes for Ireland, the United States, Canada, Australia and New Zealand.

Help to ask for before any loan

A grant does not have to be paid back; a loan does. Before signing anything, check what support you may be entitled to. In the UK, your local council may run a local welfare assistance scheme or a hardship fund for food, energy and essential items. Citizens Advice can check whether you are claiming every benefit you qualify for, and energy and water suppliers often have hardship funds or social tariffs. Food banks and local charities can bridge a gap of a few days.

Before you contact anyone, gather:

• your last three bank statements;
• proof of income (benefit award letters, payslips, pension statement);
• the bill, quote or arrears letter you need help with;
• a list of your regular outgoings and any debts.

Borrowing on a low income: realistic options

A low or irregular income does not leave you with only expensive lenders. Several legal routes are designed for people in your position:

• Credit unions: member-owned, not-for-profit lenders regulated in the UK by the Financial Conduct Authority (FCA). Their interest rates are capped by law and many offer small loans to people on benefits.
• Budgeting Loans and Budgeting Advances: interest-free help from the Department for Work and Pensions for essentials, repaid from future benefit payments.
• No-interest loan schemes: run by charities and community lenders in some areas; see our page on interest-free loans.
• Community development finance institutions: social lenders that look at your whole situation rather than just a credit score.

Notes for other countries

In Ireland, credit unions are widespread, and the free Money Advice and Budgeting Service (MABS) can help with budgeting and debt. In the United States, some federal credit unions offer small "payday alternative loans"; the Consumer Financial Protection Bureau publishes guidance on borrowing. In Canada, the Financial Consumer Agency of Canada explains the cost of credit. In Australia, the No Interest Loan Scheme is run by community organisations, and the government advance on Centrelink payments may be an option. In New Zealand, Work and Income can grant hardship assistance, and community microfinance exists for people on low incomes.

Compare the real cost: APR

The figure that matters is the APR (annual percentage rate), which includes interest and compulsory fees. Always compare loans on APR and on the total amount you will repay in pounds. In the UK, high-cost short-term credit (payday loans) is subject to an FCA price cap, but even capped loans are expensive when rolled over or taken one after another. A lender who will not tell you the APR or the total to repay should be avoided.

The dangers: high-cost credit and the debt spiral

Payday loans, rent-to-own shops, doorstep lending, catalogue credit and buy-now-pay-later all look convenient on a small budget. The trouble starts when one loan is used to pay another, or when repayments eat into money needed for rent and food.

If repayments are already a struggle, borrowing more rarely helps. Talk to a free adviser first: they can contact creditors, arrange affordable payments and, in England and Wales, explain the Breathing Space scheme, which pauses most interest and enforcement while you get advice.

Loan scams to watch for

People who are short of money are a prime target for fraudsters. Walk away if:

• you are asked to pay a fee before the money is released ("admin", "insurance" or "unlocking" charges);
• the offer comes through social media, WhatsApp or a stranger who "lends to everyone";
• approval is guaranteed whatever your credit history or income;
• you are asked for card details, online banking codes or payment in gift cards or vouchers.

In the UK, check any lender on the FCA Register before you share personal details. Never pay anything upfront.

Free debt advice

Good debt advice is free, confidential and does not depend on your income. In the UK you can contact Citizens Advice, StepChange, National Debtline or the government-backed MoneyHelper service. Be wary of firms that charge for debt solutions you could get at no cost.

How to use this site

Pages are grouped into sections. To compare lending options, start with loan types on a low income. If your difficulty is linked to your circumstances (out of work, on benefits, disabled, retired, a student or with a poor credit record), use help by personal situation. For urgent needs, support before credit lists where to turn first. Each essential expense, from rent and energy to glasses and school costs, has its own page, and help country by country covers local rules.

Every page puts help first and credit second, with links to official sources.