Summary: This article explains what a budgeting loan is, under what circumstances an individual may consider one and how to apply.
In recent years, the cost of living has soared and, as a result, more and more people are struggling with everyday finances. There has been huge growth in credit lenders, such as pay day loan companies, as well as debt solution companies, helping those who cannot repay their loans.
A Budgeting Loan is a government funded scheme whereby individuals low income can take an interest free loan to help pay essential items, usually over a period of 104 weeks
Am I eligible for a budgeting loan?
The criteria required to qualify for a budgeting loan is pretty straightforward, the applicant or their partner must have been getting either income support, Jobseeker's Allowance, income related Employment and Support allowance or pension credit for at least the previous 26 weeks.
How much can I borrow?
How much can be borrowed depends on a number of factors. According to gov.uk, being single, having children, ability to repay the loan, having savings over £1000 or already owing money to the social fund will all impact the amount that will be lent. It will also depend on what the money is to be used for.
What can in I spend a budgeting loan on?
A budgeting loan is designed to help those in need, and therefore can be used on anything that could be considered essential. gov.uk lists the following as items a budgeting loan can be used for:
• furniture or household equipment
• clothing or footwear
• removal expenses when you move home
• travelling expenses
• things to help you look for or start work
• improving, maintaining or securing your home
• maternity or funeral expenses
• repaying hire purchase or other debts you took out to pay for any of the above
How can I apply for a budgeting loan?
The applicant should complete form SF500 - budgeting loan claim form, which is available from the local Jobcentre Plus, or can be downloaded from gov.uk. Following completion, it should be posted or taken into the local Jobcentre Plus.