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Budgeting loans

Budgeting loans are an accessible solution for people on low incomes who require money to cover an unexpected expense. They’re interest-free and automatically deducted from means-tested benefits, making them the perfect solution.

Before applying, it’s wise to take a close look at your expenses. Doing so will enable you to identify where money goes and create an achievable budget for the coming month.

What is a budgeting loan?

Budgeting loans from the Social Fund are interest-free, repayable loans designed to help you cover one-off expenses that may be difficult to budget for. Examples of such items include furniture or household goods, clothes, rent in advance, travelling within the UK, maternity expenses, funeral costs and repaying hire-purchase loans.

Apply for a budgeting loan online via email, link or fax; the process may take up to six weeks. No interest will be charged but you must repay the full amount over two years.

Who is eligible for a budgeting loan?

In the UK, living costs are rising. As a result, many people are looking for ways to save money or access extra assistance – particularly those on low incomes or who receive benefits.

Budgeting loans can be a great way to cover essential costs such as furniture or household equipment, clothes, footwear or home improvements. Plus, they’re interest free and don’t affect other benefits you may be receiving.

Income Support, Jobseeker’s Allowance, Employment and Support Allowance or Pension Credit recipients who have been receiving these benefits for at least 26 weeks can apply for a budgeting loan. Furthermore, Universal Credit claimants have the option of receiving an advance on their budgeting needs as well.

How do I apply for a budgeting loan?

Budgeting loans from the Social Fund provide interest-free funds to people on benefits. They’re an excellent way to purchase furniture, clothes and shoes as well as rent. Other costs linked with moving house, maintenance or improvements on your home, maternity costs and funeral expenses may also be covered by these loans.

Applying for a budgeting loan can be done online or over the phone. Alternatively, you may complete and return a paper form to Jobcentre Plus.

If you are not satisfied with your budgeting loan decision, you have the right to request a review. Simply write to the address on your decision letter within 28 days and explain why you think it was incorrect and ask for it to be reconsidered.

How do I pay back a budgeting loan?

Budgeting loans differ from regular loans in that they’re automatically deducted from your benefits – without the need to worry about interest. A budgeting loan can help you build savings and get back on track while giving you a chance to take stock of finances and budget. If need be, call Jobcentre Plus or your local job centre for advice; they will do their best to find a solution tailored to fit within both your needs and budget.

For further details on budgeting loans, check out the DWP website. This site also has plenty of helpful tools and resources to help you maximize your money management.

Can I ask for a budgeting loan review?

If you are unhappy with a budgeting loan decision, it is possible to request a review. Directions issued under section 38(10)(b) outline the process for conducting these reviews. If you believe the decision is incorrect, apply to have the case reviewed by an officer at Independent Case Examiner Office (ICE) within 28 days of receiving your decision letter; this ensures your review can be properly concluded.