Understanding Budgeting Loans

 

If you are considered low-income and have a financial emergency, you may be able to borrow money from the government. While there used to be several types of loans offered by the government, such as the Crisis Loan and Community Care Grants, the only loan now available is the Budgeting Loan. There are certain requirements that must be met in order to be eligible for this type of loan, but if you meet these requirements, it can provide one of the best ways to obtain the financing you need. Below is some information about the Budgeting Loan, how to determine if you are eligible and how to apply.

 

Budgeting Loans

 

A Budgeting Loan is offered to those people who are receiving some type of governmental benefits. A loan must be obtained for at least £100, but the maximum amount you will qualify for depends directly on your specific set of circumstance. They will take various factors into consideration, such as if you are married or single, how many children you have, how much money you make, and your ability to repay the loan.

 

The money can be used for a wide range of reasons, including to pay your rent, purchase home furnishings or appliances, moving expenses, costs for looking for new work, transportation costs, vehicles repairs, costs associated with having a baby, and costs of a funeral. In addition, these funds can be used to repay any loan or money that was previously borrowed to purchase any of these things.

 

Eligibility

 

To be eligible you must have been receiving either Income Support, Income-Based Jobseeker’s Allowance, Pension Credit or Employment and Support Allowance for a minimum of 26-weeks. In addition, you cannot already owe more than £1,500 to the government through any other type of loan, such as another Budgeting Loan or a Crisis Loan. Once you pay down the amount of the first loans to under £1,500, you can apply for an additional loan.

 

Repayment

 

One of the best benefits of the Budgeting Loan is that you will be charged zero interest on the amount you borrow. This means that you will only have to pay back the exact amount of money that you borrowed in the first place. You also will have a total of 104 weeks or two-years to repay this loan. A payment plan will be set up with you at the time you take out your loan and adjustments can be made later if necessary.

 

How to Apply for a Budgeting Loan

 

To apply for a Budgeting Loan, you should go online and print a copy of Form SF500, or pick up the form at any Jobcentre Plus office. You must complete this form in its entirety and then return it in person or mail it directly to your local Jobcentre Plus office. You will receive a decision about your loan within a few weeks. If you are denied a loan or feel that the amount is too low, you have 28 days after the decision was made to appeal the decision. An independent reviewer will review your application within 21 business days to determine if the decision was correct or not.

 

If you have any additional questions about the Budgeting Loan or you want to apply for one, you should head to your local Jobcentre Plus office. They will have all of the paperwork you need and be able to answer any additional questions you may have. Keep in mind, that you may be required to show proof of income and assets when you apply for this loan to help determine you eligibility