Budgeting Loan

A Budgeting Loan is a one-off lump sum that will help you to pay expenses that you are unable to cover because your current income is too low. The Budgeting Loan is, as the name suggests, a loan: you will be required to repay it on a weekly basis. It is intended to help people who have a lower income cover unusual costs without getting into excessive debt, and for this reason it is an interest-free loan also free from income tax. You can apply for a Budgeting Loan if you need help paying for:

• A deposit for new rented accommodation, or your moving costs
• New items of furniture or necessary home improvements
• Necessary clothing, footwear, or specialised clothing
• Necessary home maintenance, perhaps roof insulation
• Necessary home security
• Necessary travel costs, perhaps to travel to a job interview or a funeral
• Costs incurred whilst seeking employment or starting a new job, such as childcare
• Clearing debts which you have incurred paying for the above

Budgeting Loans are intended to help people on a low income: you may qualify if you are currently entitled to Pension Credit (see Pension Credit), Income Support (see Income Support) or income-based Jobseeker’s Allowance (see Jobseeker's Allowance).

The exact amount you will receive as a Budgeting Loan depends on your personal situation, for example how many children you have, how much the government is prepared to loan you, how much money you have in savings and how much money you currently owe the government as a result of other loans of this nature, such as Crisis Loans (see Crisis Loans). If you are entitled to a Budgeting Loan you will receive at least £100, but may be entitled to up to £1,500 depending on your needs and your circumstances.

If you wish to apply for a Budgeting Loan you should contact your local Jobcentre Plus for assistance and an application form. You can contact the Jobcentre Plus information line on 0800 055 6688 if you need telephone assistance. If you are given a Budgeting Loan you will be required to agree to the terms and conditions of repayment. You will be required to make weekly repayments, but the repayment period can be negotiated. Your repayments may be automatically deducted from any state benefits to which you are currently entitled.

If you are successful and accept the terms of the loan then the Budgeting Loan will usually be paid as a lump sum into an account you nominate, via direct debit. Should you encounter any problems with making your repayments, it is important that you contact the Jobcentre Plus office which processed your claim as soon as possible. You can also contact your local Jobcentre Plus again if you feel that your application was unfairly refused.