What is a budgeting loan? Who can apply for it? How much can I get?
It is useful, but hopefully you’ll never use them.
This year, we have mentioned many cost of living crises in our articles, and there is little news to be excited about except for rising prices and skyrocketing energy bills.
In the months ahead, people across the UK are likely to live harder and struggle against the bills.
Budgeting loan is a government program that helps certain benefit recipients borrow money to buy necessities.
It is an interest-free loan that can even pay for furniture, clothing, rent, and home maintenance.
It can be used in a wide range of ways, it can also cover travel costs within the UK, costs associated with getting a new job, maternity costs, funeral costs and loans to repay the above items.
How to Get Budgeting Loans
Anyone receiving benefits such as income support, income-related employment allowances and superannuation credits for at least six months is likely to apply for a budgeting loan.
If you’re on Universal Credit, you won’t be able to get a budgeting loan.
Those involved in industrial action such as strikes, and those with debts more than £1,500 on crisis loans and budgeting loans are also ineligible.
Eligible individuals can apply online and will receive a response within 7 days of submitting your application.
How Much Budgeting Loan to Get
The minimum loan amount is £100 and the maximum amount is subject to availability.
Singles can get up to £348 and couples up to £464.
If you claim child benefit, you can get £812.
How to Repay the Loan
People with certain benefits can get it. Lenders simply repay the amount they borrowed, which is automatically deducted from the benefit.
Usually, benefits withdrawals are always related to what an individual can afford, and the full amount usually needs to be repaid within two years.
Therefore, it can help you through difficult times by addressing urgent financial needs in the short term.