A budgeting loan is designed to assist those that are on a low income to meet extraordinary costs that do not crop up often, are essential to everyday life, and would be difficult to pay especially for those on benefits. There are certain criteria that you must meet in order to be accepted for such a loan and, following application, you will receive a decision by letter from the DWP.
Looking through forums and advice sites, one of the most common reasons for being rejected a budgeting loan is the fact that the applicant does not meet the full requirements. Specifically, your application will be rejected if you have not been in receipt of the appropriate benefits for a minimum of 26 continuous weeks. Read the full list of budgeting loan eligibility criteria.
When you receive a response from the DWP you will either receive one or more offers for the loan or you will receive a rejection letter. You do have the right to ask for the decision to be reviewed but if you fail to meet any of the eligibility criteria, including being in receipt of the right benefits, your review will give the same outcome.
You have the right to request a review within 28 days and by writing to the Jobcentre Plus. You should explain why you believe the decision was an incorrect one and if this review still comes up unsatisfactory then you can request a further review by the Social Fund Inspector. The Inspectors are independent from the DWP and you can download the appropriate form from their website here:
If you are turned down for a budgeting loan then you may need to consider other options. Steer clear of high interest debts like payday loans because they can and often do lead to further financial trouble. An IVA, or Individual Voluntary Agreement, may be a good way of reducing your monthly expenditure because it could lead to a reduction in your monthly outgoings but there are ramifications to an IVA because they remain on your credit file for 6 years from the date of acceptance. You can find out more information on IVA applications on the BudgetingLoan.co.uk site.