What is a Budgeting Loan?
Budgeting loans are government initiatives that enable those on benefits to borrow money for essential household items. These loans are interest free and can provide relief to those who find it difficult to budget their incomes properly.
Apply for a budgeting advance online or over the phone with your work coach’s help. They’ll need details of your income, savings and outgoings in order to determine if you meet eligibility and how much can be borrowed.
What is a budgeting loan?
Budgeting loans are government initiatives that enable those on certain benefits to borrow money to cover essential costs. There’s no interest charged and repayments are automatically deducted from your benefit payments.
Your ability to borrow will depend on how much savings you have and if you already have another budgeting or crisis loan with the Social Fund. If so, any new loans would need to be paid back before being considered for consideration by the Social Fund.
Beginning November 14th 2022, you can receive telephone communication regarding your budgeting loan decision as well as a letter by post. This makes the process faster and simpler for you; additionally, you have the option to request a review of your decision.
Who is eligible for a budgeting loan?
Benefit recipients, such as Income Support, Jobseeker’s Allowance or Employment and Support Allowance who have been receiving benefits for six or more months can apply for a budgeting loan. Unfortunately, those receiving Universal Credit cannot get this type of loan but rather an advance on their budgeting needs.
When borrowing money for your budgeting loan or advance, the amount is dependent upon your individual circumstances and savings level. If your savings exceed PS1,000 (PS2,000 if aged 63 or over), any extra funds in savings will reduce the loan or advance amount by PS1 per PS1 above that limit.
How do I apply for a budgeting loan?
Budgeting loans from the Social Fund are interest-free loans available to people claiming certain income-related benefits. How much you can borrow depends on your earnings and how much you and your partner have saved up.
Applying for a budgeting loan can be done online or via post. Generally, approval and disbursement of funds usually takes between 5-6 weeks depending on how you apply.
Your budgeting loan repayments will be automatically deducted from your weekly benefit income. You must repay everything within two years.
How do I get a budgeting loan decision?
If you’re fortunate enough to win a budgeting loan of your own, chances are you’ll receive it via mail. But if you live in England, Scotland or Wales, the process can also be completed via phone – making it especially helpful if you have low income and disability in the family tree. Nevertheless, it may still take some time to sift through all the applications in order to find one that meets all of your individual requirements; that said, asking your local Jobcentre Plus for help may be worthwhile as they will give an assessment tailored specifically towards individual situations.
How do I pay back a budgeting loan?
Budgeting loans can help cover one-off expenses that are hard to budget for, such as furniture, household goods, clothes or footwear; rent in advance; costs linked to moving house; or costs linked to getting a new job. The amount of the loan depends on your income and ability to repay; repayments must be made within 104 weeks and taken directly from benefits. If you experience difficulty repaying your budgeting loan, get in touch with Jobcentre Plus or your local jobcentre for advice and assistance.