Crisis Loan Vs Budgeting Loan

Both budgeting loans and crisis loans are emergency loans provided by the Social Fund and meant to help out in times of financial difficulties. Both are interest free loans and both are available to individuals and families that are on a low income. However, whereas the budgeting loan does require that you have been receiving specific benefits for a period of 26 weeks or more, this is not the case with a crisis loan.

Amount You Can Borrow

A budget loan offers up to £1,500, assuming that you do not owe any other money to the Social Fund. A number of factors will be considered when considering your application but this is the maximum amount you can borrow. With a crisis loan, however, there is effectively no upper limit. If accepted, you will be able to borrow the amount that you need to borrow to help you through the difficulties you are facing.


A budgeting loan requires that you have been receiving, for a period of 26 weeks or more, Income Support, Jobseeker’s Allowance, Employment and Support Allowance, or Pension Credit. However, there are no such criteria for borrowing money with a crisis loan. You do need to be aged 16 or over, though, and you need to be able to show that you are indeed suffering from some form of crisis.

Crisis Conditions

There are a number of things that may be considered a crisis for the purpose of borrowing money from the Social Fund. Floods, fire, or burglary are among some of the possible cases. If you are due to start receiving benefits and do not have enough money to cover expenses or other bills then this too may be considered a reasonable reason for application.

Expenses Covered

A budgeting loan can be used for expenses like new clothing or repairs to the home. If you are awarded a crisis loan then this can also be used to cover living expenses, rent in advance, travel expenses if stranded away from home, and repaying emergency credit on a power meter as well as other expenses.


You will be expected to pay either form of loan back although both are interest free. If you are receiving benefits, your repayments will be taken directly out of these according to the terms agreed when you accept the loan. You will have up to a maximum of 104 weeks to repay either form of Social Fund loan and, because you do not need to be receiving benefits to receive a crisis loan, these can also be repaid by cash, postal order, or cheque on a weekly basis.

Social Fund Loans

The Social Fund offers a number of different forms of credit and grant to help those on low incomes to be able to pay for their daily living expenses. You should choose which applies to you most accurately and then make your application for this, ensuring that you show your eligibility to help improve the likelihood of your loan application being accepted.

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