Cashfloat have noticed that many disabled people are applying for loans. We set out to learn why this is happening and what steps can be taken to prevent disabled people from requiring the help of payday lenders. Read on…
A recent report by Scope revealed that disabled people are three times more likely to take out a loan. Payday loans are one of the most expensive forms of borrowing, with extremely high-interest rates. Nevertheless, the disabled community, who generally struggle more with finances, are taking out payday loans regularly.
We can’t help but ask why? Yet, the answer is glaringly obvious; physically challenged people have much higher expenses related to those vitally essential requirements and therefore have no choice but to use these expensive forms of credit. Therefore, fifteen percent of people with disabilities use fast loans to make ends meet.
Disability Act
Parliament passed the Disability Act in order to protect individuals with disabilities. It is important to safeguard the rights of individuals with disabilities, as they incur more costs, due to medical conditions. At the same time, it could be harder for a proportion of disabled people to earn an income, due to the nature of their disability. Some disabled people can to work, and laws ensure that employers do not discriminate against disabled people. They have equal rights, and cannot be refused a job that they qualify for on account of their disability. A disabled person who works has the equal opportunity to earn their income, and should not need to take out a payday loan.
Should a disabled person need money to cover a short term deficit, the lender will grant the loan equally to a disabled or non-disabled person, if they meet the lending criteria. Lenders do not discriminate but these high-cost loans should only be used for necessary expenditure, where you have a plan of how to repay the loan.
What Are Disability Loans For?
Disabled people live with higher expenses on a day-to-day basis. Many of them rely on loans to help them get through the month. But, what are these costs that push the disabled past the end of their paycheck, and what help is available to avoid short term loans?
Equipment
Living with a disability can be quite expensive for many reasons. Let’s think about physical disabilities, specifically. People with disabilities need equipment to ensure they still enjoy a high quality of life. Essentials such as wheelchairs and crutches are all accessories that they may be essential. The price of this equipment is shocking. A wheelchair could cost up to £100 while a mobility scooter could range in the thousands. That’s an incredibly large expense for something that is so vital for ordinary life. Without this type of equipment, many disabled people would be unable to live their lives normally.
Housing Facilities
Unfortunately, the equipment is just the tip of the iceberg. Many disabled people also have to pay for extensive renovations of any new property they buy. Building work is one of the main reasons why people take out loans. However, for the disabled, this renovation is an essential must, rather than a desire. They need to make sure their home is accessible and more importantly, safe. Countertops may need to be lowered, safety equipment might need to be installed on the stairs, and they may need to adjust bathrooms as well. As is the case with all home improvements, renovations can be costly, requiring more than the average paycheck can provide.
Additional Fees for Services
It does seem as though certain traders take advantage of the disabled. There have been reports of taxi drivers charging obscene rates for transportation for the disabled. Usually, this is because they are legally allowed to leave the meter running while they help someone safely inside the vehicle. Depending on the disability, this can add ten or twenty minutes into the journey.
Other people with disabilities have reported that travel insurance is incredibly expensive. Travel companies often charge astronomical rates, particularly if medical aid is required.
It is clear then that the lifestyle of the disabled is more expensive than the average person. However, is this the only issue?
Unemployment And The Inability To Find Work
In April 2021, over 48 percent of people with disabilities were unemployed. Consequently, it makes sense that the disabled rely on financial aid options like payday loans which are costly. Many live on a limited income. Even those who do have a job, may not be able to work full time. They may also only be able to work from home, and this again could limit their income.
Disabled people actively looking for a job may also experience difficulty finding one. There is still evidence to suggest that employers are disinclined to hire someone with a disability. In particular, individuals with a physical condition are often viewed as a liability or an added expense. There are still businesses in the UK that do not have full access for people with disabilities.
Physically challenged people who work, often face another problem. They tend to have more medical issues that put them off work for longer periods. Although they may still receive their income, in many cases disabled individuals will miss the chance for a promotion or a pay rise due to prolonged sick leave. Additionally, after a certain number of sick days, employers may reduce the paycheck, or not pay sick leave at all. In many places, medical care is not free, and people with disabilities have to pay at least a portion of the cost, despite government welfare benefits. This leaves the disabled short of cash at the end of the month with no other choice than to take a cash advance loan.
Loans for People on Disability Benefit
Recent reports about government cuts to welfare benefits seemed to suggest that disabled people receive plenty of financial support from state funds. In fact, some people believe that disabled persons receive more than they need to live. However, this is entirely not the case, and many individuals with disabilities receive the bare minimum in benefits. The government often runs checks on those with disabilities who are claiming benefit. If a person is found to be ‘fit to work’, their benefits may be reduced. At the same time, there have been heavy cuts to benefits recently that have left people with disabilities in a tight spot. Disability benefits have decreased while living costs have stayed the same.
In the USA, people with disabilities do receive benefits for medical care. However, they are still expected to pay twenty percent of any medical costs. Anyone who has ever had medical treatment in America will know that the bills can be obscene. Some medical procedures have price tags as high as $10,000. It is no wonder that people with disabilities feel they have no option but to take out a loan.
Increased costs and the little amount of help from the government leave disabled people in desperate situations.
What Should Disabled People Do If They Can’t Pay Their Bills?
Disabled people on low income and claiming disability benefits are unlikely to be approved for a bank loan due to their unstable finances. They may be tempted to take out a “loan for disabled people” or “loan for people on benefits”. This may not always be a good option. These short term loans are always charged at high interest rates and can leave a person in a worse position financially.
So what is the alternative? If a disabled person finds themself struggling to pay bills, they should speak to the people they owe money to, and try to arrange an affordable repayment plan. This is the best option for household bills such as energy and Council Tax, as well as loan repayments. For financial advice contact a free debt advisor. YOu can use the debt advisor locator tool here.
In Summary…
One fifth of disabled people struggles to make payments back on their credit cards. This suggests that they would not be able to afford to pay back the excessive interest rates on payday loans. It could mean disabled people who use payday loans are more likely to fall into the debt trap. Many feel they cannot afford the high costs of living without these loans. If you feel your were missold a payday loan, you may be able to get your money back.
It seems clear that there are not enough benefits to give the disabled even the most basic quality of life. Due to this, many are forced to seek out risky options like a short term loan. Although new evidence suggests the level of employment for people with disabilities is rising, it might just not be enough.
