How to Apply For a Budgeting Loan

If you are receiving benefits and in need of funds to cover essential costs, a budgeting loan could provide the extra funds you require – without interest charges being added directly into a bank or building society account.

Repayment for this loan type is automatically deducted from means-tested benefits each week; this differs from emergency loans in that repayment is automatically taken out.

What is a budgeting loan?

Budgeting loans from the Department for Work and Pensions (DWP) provide interest-free payments to help cover additional costs associated with receiving certain benefits. You could qualify for one to cover items like furniture, household appliances (like washing machines or other “white goods”) clothing or shoes rent advance essential repairs/improvements maintenance security travel expenses related to finding employment maternity costs funeral costs as well as repayment of hire purchase loans.

Budgeting Advances may be available if you are receiving Universal Credit; payments taken directly out of your benefits without impacting other benefits you receive or counting toward the Benefit Cap.

Apply for a budgeting loan either online or by post; online applications tend to be quicker as you receive an instantaneous decision and review option should any be necessary.

Who is eligible for a budgeting loan?

If you are receiving benefits and in need of essential items, applying for a budgeting loan could help cover their cost. The DWP offers these interest-free loans which will automatically deducted from your weekly benefit payments; your repayment should occur within two years.

Depending on the level of income in your household, you could qualify for a PS500 Sure Start Maternity Grant which is non-repayable and could help cover essentials during your pregnancy. Jobcentre Plus offices may also provide advice regarding other ways of accessing funds to cover essentials.

Universal Credit offers budgeting advances that differ from budgeting loans by being interest-free payments. If interested, make your request online in your Universal Credit online account or request one by post; use this form to describe your circumstances and outline how much money is necessary to cover expenses.

How does a budgeting loan work?

Budgeting loans from the Social Fund provide interest-free assistance with essential costs associated with being on benefits, without impacting or being included in your other benefits or resulting in inclusion of the Benefit Cap.

DWP will inform you how much to borrow and when your weekly repayments will begin. They may deposit it directly into your bank account or mail a cheque; alternatively you may also use mobile apps or websites to access it.

Use your money for items like furniture and essential household equipment, clothes and footwear, rent in advance, costs associated with moving house or maintaining your current home, funeral expenses and settling hire-purchase loans. The DWP will also consider whether any health-related needs require immediate consideration.

If you disagree with the decision to grant you a budgeting loan, you may request a review within 28 days of being informed about it.

How often can I apply for a budgeting loan?

If you already have a budgeting loan and wish to apply for another, the Department of Work and Pensions will decide how much money is affordable to borrow based on their assessment of all existing loans and whether payments can be made on any outstanding debts.

The DWP will also take into account your need and any health problems in you or your family, before providing you with a budgeting loan that should usually be repaid within two years but may or may not incur interest payments.

Budgeting loans can be obtained by filling out form SF500, which you can download online or pick up at Jobcentre Plus. Letter, telephone and post requests for the form may also be accepted – with decisions expected within 21 days.

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