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Budgeting Loans

Budgeting Loans

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Applying for a loan can be a little nerve wracking at the best of times and if you have been claiming any income related benefits, you may find it difficult getting credit from usual lenders. But in cases where you need a loan to pay for essential items such as furniture, clothes or rent and you have been claiming certain benefits for at least 26 weeks, you may be eligible for an interest free loan from the government called a ‘budgeting loan’.

Who can apply for a budgeting loan?

Loans aren’t given out on a whim and nor is there a set amount you are guaranteed to receive, but if you meet the criteria and apply for a loan, the amount will be at the discretion of the decision maker at your local Jobcentre Plus. The loans should not be applied for in order to pay for non essential items such as Jewellery or a holiday, but should be to help you pay for clothing, rent or removal expenses, home security or maintenance, household items, travel expenses or costs involved in looking for work, funeral or maternity expenses or to pay off higher purchase loans or other loans taken out to pay for any of these items. You won’t need to specifically list or explain your reasons for needing the loan but if it’s for anything other than these listed, then you would not receive a budgeting loan.

Struggling with budgeting

You must meet the criteria

In order to meet the criteria, you must have been claiming either Pension Credit, Income Support, Income Based Jobseekers Allowance or Income Related Employment and Support Allowance for at least 26 weeks. If you or your partner have been disqualified from claiming Jobseekers Allowance, you would not be able to claim a budgeting loan. The amount you receive will depend on your personal circumstances and whether you have any savings already. Whether you are single, have children, have already received a previous budgeting loan or able to pay back the money, will all be taken into consideration when deciding if and how much money you may be loaned. Should you already owe over £1500, you will not be able to apply for any further loans from the social fund.

How to apply

To apply for a budgeting loan you will need to complete a SF500 form and take or send it to your local Jobcentre Plus where they will look into your claim and make a decision on whether you can be given the loan and how much. In most cases, money that is lent to you should be repaid within 104 weeks. If you application is rejected yet you feel you still qualify, you should ask for a review by a Social Fund Inspector who will reconsider your case and advise you of a decision within 21 days. If they decide you aren’t eligible and you still don’t agree, you can then ask for an Independent Case Examiner to review your application and will come to a final decision within 21 days.

Repayment terms

If you have been given a budgeting loan, your repayment terms will be based on your circumstances, you and your partners income and if you have other debts that will affect the repayment rate. Any benefits you and your partner receive will also be classed as income, including benefits such as Maternity Allowance, State Pensions and Bereavement  Allowance. If for any reason you can’t make a repayment, you should contact Jobcentre Plus as soon as possible so that you can make arrangements or offer solutions to stop you falling further behind.



About Rebecca Robinson

About Rebecca Robinson

After spending the last 8 years juggling life as a mum of two, wife and working full time as a Project Manager for a global telecommunications company, Rebecca Robinson made the decision to follow her love of writing and took the plunge; turning her passion into a full time career. Since becoming a full time writer, Rebecca has worked with various media and copy-writing companies and with the ability to make any topic relevant and interesting to the reader, now contributes to The Working Parent on articles ranging from credit cards to teenage relationships. Ever the optimist, Rebecca's dreams for the future include a house in the country filled with children, dogs and horses in the field!

Website: Rebecca Robinson

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