Budgeting loans

You can get a budgeting loan of up to £1, 500 from the Social Fund. A budgeting loan helps you spread the cost of essential things over a more manageable period. You have to repay a budgeting loan.

What are budgeting loans for?
Who can apply?
How do I apply?
What are my chances of getting a loan?
How is the loan paid back?
What if my application is turned down?
What happens if the Social Security Agency doesn't change the decision?

What are budgeting loans for?

You can use a budgeting loan to pay for:

furniture,
household equipment,
clothing and footwear,
travel expenses within the UK,
rent in advance if you have to move home,
essential home improvements,
expenses related to finding a job (a suit, for example).

You can also apply for a budgeting loan to help to pay off hire purchase or other debts taken out to buy essential items like those listed above.

Who can apply?

You will only get a budgeting loan if you (or your partner) have been getting income support, income based jobseeker's allowance or income related Employment and Support Allowance for at least 26 weeks, or receive pension credit.

Your chances of getting a loan and how much you might get will depend on your personal circumstances, including:

how long you have been getting benefits,
the number of people who live with you,
if you already owe money to the Social Fund because of a previous loan,
your ability to repay the loan.

You loan will be reduced if you have more than £1, 000 in savings. If you are over 60 you can have up to £2, 000 in savings before your budgeting loan will be reduced.

How do I apply?

Budgeting loans are made by the Social Fund. You can apply for a loan for any amount from £100 up to a maximum of £1, 500. You can make an application at your local Social Security or Jobs & Benefits office. Application forms are available online at the Social Security Agency website.

What are my chances of getting a loan?

There is a limited amount of money available for budgeting loans. Get advice if you need a budgeting loan. An adviser can:

help you convince the Social Security Agency that you should get a budgeting loan,
check whether you can apply for a community care grant instead,
explain the application forms,
help you work out how much you need to ask for,
help you to appeal if the Social Security Agency says it can't help you.

How is the loan paid back?

You must repay the loan within 104 weeks. The loan is interest free and you repay what you borrowed. If you are on benefits, a fixed amount is deducted from your income support or jobseeker's allowance until the loan is repaid. You won't get a loan if you won't be able to repay it.

What if my application is turned down?

If you are not happy with any decision made on your application and want to ask for a review, get advice. It is often difficult to get decisions about the Social Fund changed, but an adviser could help you increase your chances of getting a loan.

If you want the Social Security Agency to review the decision you must:

apply in writing,
apply within 28 days of the date the decision was given,
explain why you think the decision was unfair.

What happens if the Social Security Agency doesn't change the decision?

If the Social Security Agency doesn't change the decision, you can ask the Social Fund Inspector to look at your application for a budgeting loan. The Social Fund Inspector is independent and can change the Social Security Agency's decision if it was wrong. Find out more about contacting the Social Fund Inspector.