People on Universal Credit can now get loans up to £812 and pay back over two years. If you’re on Universal Credit and need money for an emergency, you can borrow up to £812.
You used to have to pay it back in one year, but now you have two years. But Chancellor Jeremy Hunt said on March 6: “Nearly one million households on Universal Credit take out Budgeting Advance loans to pay for more expensive emergencies like boiler repairs or help getting a job. To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months.”
This change means people will pay back less each time but for longer. It should make things easier if you’re worried about money because of benefit cuts, reports the Daily Record.
You can learn how to get a Budgeting Advance loan on the GOV.UK website.
If you get other benefits from the Department for Work and Pensions (DWP), you might be able to get a Budgeting Loan too. This is for important things you can’t afford right now.
You can apply if you’ve been getting Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, or Pension Credit for six months or more. The loan is paid back by taking a little bit of money from your benefits.
For older claimants who have switched from Universal Credit to Pension Credit, the DWP will add the time they were receiving Universal Credit to the six months.
The DWP has published easy-to-understand online guidance that simplifies the process including eligibility, what it can be used for and how it is paid back. This could potentially help more people access the service.
What is a Budgeting Loan?
A Budgeting Loan is financial help from the DWP that people who have been claiming the earlier mentioned benefits for at least six months can apply for.
It’s important to remember that since it’s a loan, the money must be paid back through benefit payments.
Who cannot apply for a Budgeting Loan?
People claiming these benefits are not eligible:
If you’re employed and currently involved in a trade dispute, you can’t get a Budgeting Loan. You also can’t get a loan if you owe more than £1,500 in total of Crisis Loans and Budgeting Loans.
You can find out more about eligibility on GOV.UK.
What can a Budgeting Loan be used for?
The loan is designed to help pay for essential items or services.
How much you could get:
The minimum amount you can borrow is £100.
The loan is paid back in full to the DWP at 0 percent interest within two years. When the DWP pays your benefit, it will deduct an amount to help pay off your loan.
The amount you repay depends on how much money you have, including any benefits and what you can afford. Even if you stop receiving benefits, you still have to pay back the rest of your Budgeting Loan.
If you are eligible for a loan, the DWP will tell you how much you have to pay each week from your benefits. If you agree, these payments from your benefit will start right away.
How do you get a loan?
You can try for a Budgeting Loan online or by post. The DWP says that applying online is quicker: “You will get a quicker decision on your Budgeting Loan by applying online.”
What happens after you apply?
After you apply, the DWP will tell you if you can or cannot get a Budgeting Loan. You can ask them to notify you by email, text or letter.
Just remember, if you asked for an answer by email or text message, you will hear back within seven days. If you asked for an answer by letter, they’ll send it within 21 days.
How to say yes to a loan
If you can get a Budgeting Loan, you have to ‘accept’ their decision before they give you the money.
How you say ‘yes’ to your decision depends on how you applied:.
Once you’ve said yes to the offer.
When you’ve said yes to the loan, the DWP will put the money into your account. When you receive your money depends on how you accepted the loan offer.
Remember, if you gave your mobile phone number to the DWP, they will text you when they’ve put the money in your account.
For more information on how to apply for a Budgeting Loan by post or how to appeal a decision, visit the GOV. UK website.
