Budgeting loan is administrated under the department for work and pension (DWP) through the social fund. These loans are interest-free and non-taxable. That simply means the applicant pays back the exact same amount that he or she borrows without any interest and tax burden.  Budgeting loan will help to pay for essential necessities like to buy clothes, furniture also for advance rent payments or moving homes, funeral etc.

For fulfilling the eligibility criteria of getting a budgeting loan the applicant must have been getting one or more of these benefits for the last 6 months:

•    Income Support

•    Income-based Jobseeker’s Allowance

•    Income-related Employment and Support Allowance

•    Pension credit

And if the applicant is involved in any industrial action like a strike, walkout or lockout and owes more than £1,500 in total for Crisis Loans and Budgeting Loans then the applicant cannot get budgeting loan. Although if a person already gets a universal credit card then he or she cannot be eligible to get a budgeting loan. Instead of budgeting loan, the claimant has to apply for the budgeting advance.

The lowest amount the applicant can borrow is £100. If the applicant is single he could get up to £348. In case the applicant has a partner then the amount will be £464. And in the applicant and his/her partner claim for child benefit then the amount will be increased to £812

The amount of budgeting loan depends on whether the applicant:

•    Is able to pay back the loan within the prescribed time

•    has any saving or investments of more than £1,000 (£2,000 if you or your partner are 63 or over)

•    paying back existing Budgeting Loan or Crisis Loan if any

Online and offline (using the paper form) both facilities are available to apply for a budgeting loan. If you are an appointee applying for the loan on behalf of someone else then you must opt the offline mode. The application for budgeting loan goes through several stages. The whole process can take approx. 3-4 weeks from filling the form to its acceptance and finally the issue of payment.

After the applying for the budgeting loan, the applicant will receive a letter that tells if the applicant has been offered a loan within:

  • 20 working days if applied through online and
  • 25 days if applied through offline mode (by post).

The applicant must sign the page of acceptance letter and send it back on same address if he wants to accept the loan. After sending the acceptance letter the applicant will receive the money within 12 working days. The amount will be credited to the bank account of the applicant or building society or credit union’s account.

If we come to the point of repayment usually, the time period of pay back of the full amount of loan that the applicant had borrowed is 104 weeks or 2 years. The repayment of budgeting loan gets automatically deducted from the regular benefit payments of the applicant To apply for budgeting loan from the social fund there are no specific age rules.  If the applicant has any queries and doubts about the progress of application they can call the social fund.