Budgeting Loans are interest free loans from the Department of Work and Pensions (DWP) Social Fund that are available only to people claiming certain income-related benefits for a minimum of 6 months. You have to pay back a Budgeting Loan.
What can I use it for?
A Budgeting Loan can help pay for:
- furniture or household items (for example, washing machines or other ‘white goods’)
- clothes or footwear
- rent in advance
- costs linked to moving house
- maintenance, improvements or security for your home
- travelling costs within the UK
- costs linked to getting a new job
- maternity costs
- funeral costs
- repaying hire purchase loans
- repaying loans taken for the above items
Who is eligible?
To get a Budgeting Loan you must have been getting one or more of these benefits for the past 6 months (26 weeks (breaks of up to 28 days are ignored):
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Pension Credit
If you moved from Universal Credit to Pension Credit, any time spent claiming Universal Credit will count towards the 6 months.
You cannot get a Budgeting Loan if:
- you are currently claiming Universal Credit - apply for a Budgeting Advance instead
- you’re involved in industrial action (for example, a strike, walkout or lockout)
- you owe more than £1,500 in total for Crisis Loans and Budgeting Loans
You cannot get a full Budgeting Loan if you (or your partner) have more than £1,000 in savings. This amount is £2,000 if you (or your partner) are over 62 year's old.
How much can I get?
There are three rates of Budgeting Loan, depending on whether you are single, a couple without children or a one or two parent family with children. You can get up to the following maximum amounts:
- £348 if you’re single
- £464 if you’re part of a couple
- £812 if you have children
The minimum amount of Budgeting Loan that you can get is £100.
How much you could get depends on whether you:
- can pay the loan back
- have savings of more than £1,000 (£2,000 if you or your partner are 63 or over)
- are paying back an existing Budgeting Loan or Crisis Loan.
Repaying a Budgeting Loan
The repayments will be taken automatically from your benefits and the amount you repay is based on your income , including any benefits you receive and what you can afford.
After you apply for a Budgeting Loan, you will get a letter telling you if you have been offered a loan. The letter explains how much your weekly repayments would be if you accept the loan.
You normally have to repay the loan within 2 years (104 weeks). If you stop getting benefits, you will need to arrange another way to pay it back.