Budgeting loans
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
A budgeting loan is an interest-free loan from the social fund, which could help you to spread the cost of essential things over a more manageable period. If you get one, you will have to pay it back.
What are budgeting loans for?
You may be able to get a loan to pay for:
- furniture and household equipment
- clothing and footwear
- travel expenses
- rent in advance and/or removal expenses if you have to move home
- essential home improvements, maintenance or security
- expenses related to finding a job (a suit, for example).
You may also be able to take out a loan to pay off hire purchase or other debts taken out to buy items like those listed above.
Who can apply?
To get a budgeting loan, either you or your spouse/partner must have been on income support or income-based jobseeker's allowance for at least 26 weeks.
Your chances of getting a loan and how much you might get will depend on your personal circumstances, including:
- how long you have been on benefits
- the number of people in your household
- whether you have more than £500 in savings or £1,000 if you or your partner are over 60 (the amount you get will be reduced if this is the case)
- whether you already owe money to the social fund because of a previous loan (you can only borrow up to a maximum of £1,000).
How much can I apply for?
The minimum amount you can apply for is £100. There are three maximum amounts available - one for single people, one for couples without children, and one for families (including lone parents) with children.
How do I apply?
Budgeting loans are given out by the social fund. You can apply at your local office of the Benefits Agency or Jobcentre Plus - either in person or by telephone. Claim forms are also available online from the A to Z of Welfare Benefits.
What are my chances of getting a loan?
Get advice if you need a budgeting loan. Each council has a limited amount of money available for the social fund, so it isn't easy to get a payment. There is no standard amount and once the budget is spent, the council doesn't have to give any more grants or loans. If you want to apply, get advice first - you can use the Advice Services Directory to find a local advice centre or Shelter advice centre. An adviser may be able to:
- help you convince the Benefits Agency or Jobcentre Plus that you should be a priority (the rules about who gets priority are very complicated)
- check whether you can apply for a community care grant instead (if so, you would not have to pay this back)
- explain the forms and help you work out how much you need to ask for
- help you to appeal if the council says it can't help you.
How is the loan paid back?
You will have to pay back what you borrow within 78 weeks. If you are on benefits, a fixed amount will be taken out of your income support or jobseeker's allowance until the loan has been repaid. You won't get a loan if you will not be able to repay it.
What if my application is refused?
If your application for a budgeting loan is refused, you can ask the Benefits Agency/Jobcentre Plus to review its decision. To do this, you must:
- apply in writing
- apply within 28 days of the date the decision was given
- explain clearly the reasons why you think the decision was unfair.
If the Benefits Agency/Jobcentre Plus does not change its mind when it reviews the decision, you can then ask the Social Fund Independent Review Service (IRS) to look at your application again. The IRS can change the decision if it was wrong.
If you are not happy with any decision made on your application and want to ask for a review, get advice immediately. It is often difficult to get decisions about the social fund changed but the help of an adviser could help you increase your chances of getting a loan.
