Everyone could do with a bit of extra crash amid the current cost-of-living crisis and it's for that reason that the Department for Work and Pensions has launched a new loan.
Only people claiming certain benefits will be eligible to apply for the cash boost. Titled the Budgeting Loan, claimants can apply for the money to help them pay for essential products or services which they would otherwise be unable to afford due to their current circumstances.
You can apply online or using a paper form, but it's quicker to apply online.
READ MORE: DWP explains if PIP claimants get new £900 cost of living payments
How they work
A Budgeting Loan can help pay for:
- furniture or household items (for example, washing machines or other ‘white goods’)
- clothes or footwear
- rent in advance
- costs linked to moving house
- maintenance, improvements or security for your home
- travelling costs within the UK
- costs linked to getting a new job
- maternity costs
- funeral costs
- repaying hire purchase loans
- repaying loans taken for the above items
Check if you're eligible
To get a Budgeting Loan you must have been getting one or more of these benefits for the past 6 months:
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Pension Credit
If you moved from Universal Credit to Pension Credit, any time spent claiming Universal Credit will count towards the 6 months.
There’s a different way to get a Budgeting Loan in Northern Ireland.
What you could get
The lowest amount you can borrow is £100. You could get up to:
- £348 if you’re single
- £464 if you have a partner
- £812 if you or your partner claim Child Benefit
How much you could get depends on whether you:
- can pay the loan back
- have savings of more than £1,000 (£2,000 if you or your partner are 63 or over)
- are paying back an existing Budgeting Loan or Crisis Loan
Paying back the loan
A Budgeting Loan is interest-free so you only pay back what you borrow.
The repayments will be taken automatically from your benefits. The amount you repay is based on your income - including any benefits you receive - and what you can afford.
After you apply for a Budgeting Loan, you’ll get an email, text or letter telling you if you’ve been offered a loan. This explains how much your weekly repayments will be if you accept the loan.
You normally have to repay the loan within 2 years (104 weeks).
After you apply
After you apply you’ll be given a decision on your application. You need to accept the decision before you get your money.
If you apply online, you’ll find out if you’ve been offered a loan within:
- 7 days if you get the decision by text or email
- 21 days if you get the decision by letter
If you apply by post, you’ll get a letter telling you if you’ve been offered a loan within 21 days.
Find out more here.
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