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How to apply for budgeting loan in The U.K?

 

So you are looking for ways how you can apply for a budgeting loan in The U.K.? Does that mean you are facing drastic changes in your life and need some financial help? Do not worry; The U.K. government provides a short term, interest-free loan for such situations. This loan is known as the ‘Budgeting Loan’.

To apply for budgeting loans, you will have to pass some eligibility tests and go through steps.

Before applying for a budgeting loan, you must check your eligibility. Some conditions are needed to be met for you to be eligible. To be eligible, you must behave been receiving any one of these benefits for the previous six months;

  • Income support
  • income support based Jobseeker’s allowance
  • Income-related Employment and Support allowance
  • Pension allowance

And when are you not eligible for applying for a budgeting loan?

  • If you get ‘new style’ Jobseeker’s Allowance or ‘new style’ Employment and Support Allowance
  • If you’re involved in actions such as strike, lockout or walkout, these are called industrial actions.
  • If you owe over £1,500 for Crisis Loans and Budgeting Loans.
  • You also are not eligible for applying for a budgeting loan if you are currently getting Universal Credit and you may apply for a Budgeting Advance.

After you have checked your eligibility, now it’s time to apply. There are two ways to apply for a Budgeting Loan. You can either apply online or offline with paperwork.

How to apply for a Budgeting loan online?

If you choose to apply for a Budgeting loan online, you may fill out the form online and send it to them.

How to apply for a Budgeting loan with paperwork?

Now, if you opted to apply for the Budgeting loan with paperwork,

  • You may download the form, get it printed, fill it out, and send it. You need to fill out the form SF500 or
  • You may call the Social Fund Enquiry line and ask them to send the form to you. The paper might take up to seven days to arrive. Fill out the form and send it back by post.

What is a Budgeting loan?

What is a Budgeting loan

A Budgeting Loan is a short term interest-free government loan. This can be used to pay for the essentials at home. These are useful when you go through sudden changes or search for a new job.

What do I do after I’ve applied for a Budgeting loan?

  • After applying for the loan, wait for the message if you have been offered a loan or not.
  • If you had applied online, you might receive a text message within seven days or a letter within twenty-one days.
  • You would receive a letter informing you that you have been offered a loan or not within 21 days if you had opted for the paperwork method.

The next step is to accept the loan

  • You could follow the instructions given in the text message if you applied online.
  • And if you had applied with paperwork, sign on page 4 and send it back in the pre-paid envelope provided and send it back to the address on the letter.
  • You would receive your money within seven days of applying online or within twenty-one days if you opted for the paperwork.

How do I repay the Budgeting loan?

How do I repay the Budgeting Loan

Unlike traditional loans, Budgeting loans are interest-free; you will have to pay the exact amount that you borrowed, no extra interest will be collected from you.

  • The repayment will be automatic, a certain amount of your benefits will be automatically taken to replay your budgeting loan.
  • This amount will depend on your income, benefits and what you are capable of affording.
  • The load has to be repaid within two years of borrowing.

For what all can I get a budgeting loan to pay for?

There are several everyday things you can apply for a loan to pay for. Here is the list of all the things you could pay for with a Budgeting loan.

  • For furniture or household items or the ‘white goods’ as they are called.
  • For clothes and footwear.
  • You could use this loan to pay your rent in advance.
  • For costs linked to moving house.
  • For maintenance, improvement or security for your home.
  • For the cost linked to getting a new job, you are looking for a new job.
  • For maternity costs.
  • To repay hire purchase loans.
  • To repay loans taken to pay the above things.

What can I get out of the Budgeting loan?

What can I get out of the Budgeting Loan

There are some amounts set for specific situations and you can borrow upto £100. If you are single, you can get up to £348.

  • If you are a couple, if you have a partner, you can get up to £464.
  • If you and your partner claim child benefits, you could get up to £812.

The amount you get will also depend on certain factors such as

  • If you have savings of over £1,000 or £2,000 if you and your partner are over 63 years of age.
  • If you are already paying another Budgeting or Crisis loan.

Conclusion

Budgeting loans are short term interest-free loans provided by the government. Applying for it is pretty simple. You have the option to apply online or with paperwork. The online option takes much less time than the paperwork method.

You may first check your eligibility before applying for a Budgeting Loan. In case you are eligible, you may send the form through text messages, email or by letter if you want to apply online. For the offline mode, you may download, print and fill out the form and send it by post. The decision for offering you a loan will be sent to you within seven to twenty-one days of applying.

Accept the loan by following the instructions in the text message you received or signing on page 4 of the letter you received and sending it back to the same address. You can get anywhere from £100 to  £812. Offering a loan will depend on other factors such as your capability to pay it back, your savings or any other existing loans you are paying back. So the next time you see yourself needing some financial help, try all the options you have, including the Budgeting loan.

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