What Is A Budgeting Loan?
A budgeting loan is an interest free loan arranged through the Jobcentre Plus and offering funds from the Social Fund. The money awarded for the loan can be used for any of a number of important purchases and costs. Applications are usually made through your local Jobcentre Plus office or through your pensions office. The budgeting loan is only type of funding available from the Social Fund and is specifically aimed to help with one off payments that people on low income would otherwise be unable to meet.
What Is The Social Fund?
The Social Fund has been designed to assist those on a low income. They can provide access to a variety of grants and loans. A Social Fund budgeting loan is one such type of loan and is designed for individuals and families with low income or no income whatsoever. The Social Fund also provides maternity grants, community care grants, funeral payments, cold weather payments, and crisis loans.
How Do I Apply?
The application process is designed to be quick and simple and requires the completion of a form, which needs to be submitted to the Jobcentre Plus. You can download forms from this website or directly from the DWP site. You can also request forms from the Jobcentre Plus or your local pension office depending on the type of benefits that you have been claiming.
Am I Eligible?
There are certain criteria that must be met to ensure eligibility. Primarily, you must have been claiming one of the following types of benefit for at least 26 weeks:
- Income based Jobseeker’s Allowance
- Income Support
- Income related Employment and Support Allowance
- Pension Credit
What Can I Use A Budgeting Loan For?
When applying you must declare the reason for borrowing the money. Any of the following reasons will be considered a viable reason for borrowing money with a DWP Budgeting Loan:
- Removal Expenses
- Advance Rent
- Home Improvements
- Home Maintenance
- Home Security
- Work Expenses
- Maternity Expenses
- Funeral Expenses
- Repaying debts used to cover these expenses
How Long Will I Have To Wait For A Decision?
A budgeting loan application is made in writing through the Jobcentre Plus. The review process takes up to 9 working days from receipt of your application and you should allow another couple of days to hear back regarding the decision.
Do I Have To Accept The Offer Made?
If your application is accepted you will usually receive a minimum of one offer, up to as many as three different offers. You do not have to accept one or any of these offers and, if you do not believe the offer made is reasonable, then you may appeal that decision.
What If I Disagree With The Decision?
The Social Fund considers every application individually and will consider any existing debt with the Social Fund, your expenditure and how much you can afford to repay, and what you need the money for. However, if you disagree with the decision made you can appeal against that decision in the hope of securing a favourable offer.
How Will The Money Be Paid To Me?
If you accept the budgeting loan offer that is made to you, the money will be paid into an account of your choosing. You can use a bank account, post office account, or other financial account. You will be asked to provide details of which account you wish to use when making your application.
How Will I Repay The Money?
Your Jobcentre budgeting loan offer will include details of repayments that will need to be made. These repayments will usually be taken directly from your benefits.
What If I’m Struggling To Make Repayments?
If you find that you are struggling to meet the regular repayments agreed it may be possible to extend the term of the loan. Although you will still have to repay the same amount you will have longer to do so, meaning that your monthly repayments will be lower. You should contact the Social Fund as soon as you realise that you are struggling to make repayments.