You can get a budget loan if you are on a low income and are in a need of extra cash to help with the certain important expense. A Budget loan is an interest-free loan it means that you are not charged any rate of interest on the amount you borrow. You have to pay back the exact same amount that you get from the social fund.
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Eligibility to Get a Budget Loan
First of all, in order to be eligible to get a Budget loan, you must have been getting one of these benefits mentioned below for the past half year:
- Any supportive income
- Income-related Employment and Support Allowance
- Income-based Jobseeker’s Allowance
- Pension Credit
Where can you use Budget Loan?
- House equipment like furniture or electrical appliances.
- Clothes or footwear
- If you have to pay advance rent
- Remove all expenses for a new home
- To start looking for work, or start a new job
- renovation or maintenance of your home
- traveling expenses within the country
- maternity or funeral expenses
- To repay debts you took out to pay for any of the situations above.
How Much of an Amount Can You Get in a Budget Loan?
You can apply to borrow an amount between £100 to £1500 with a short term loan.
The exact amount depends on the following terms and conditions:
- Number of people in your house?
- If you can repay the loan amount?
- How much you owe any money to social fund?
- If you have any savings already, the amount can be lower if you have a decent amount of money in the savings.
Things that are not considered:
- How urgently you need it.
- Any health issues you or your family members have.
How to pay back Budget Loans?
Transfers of budget loan amount get credits into a bank, building society or any other account provider’s account.
Repaying of Budget Loans?
So, you pay repayments out of your benefits usually, however, another method can be agreed upon if you are not getting any benefits. At the time of your loan agreement, they decide on repayment methods.
As there is no interest rate, you only have to pay the exact amount that you borrow. You have to pay the budget loan within 104 weeks.
How to Apply for a Budget Loan?
Most of all budget loans, you can apply by asking your nearest Social Security or Jobs & Benefits office to send you claim form SF500.
Also, another option available is to download the form and print it. The form comes with notes on how to fill the form and also where to send it.
If you have a bad credit you can go for loans for bad credit no guarantor.
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