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What is a budgeting loan?

A budgeting loan is an interest free loan for people who have been on a qualifying benefit for at least 26 weeks. They can help you spread the cost of essential items over a more manageable period. You may be eligible for a loan if you are claiming income support, income based jobseeker's allowance, income based employment and support allowance or pension credit.

What is a budgeting loan?

A budgeting loan is an interest-free loan from the social fund, which you can apply for if you need help paying for:

  • furniture or household equipment
  • clothing or footwear
  • rent in advance for a new home
  • removal expenses
  • travel expenses
  • things to help you look for or start work (for example, a suit)
  • essential home improvements, maintenance or security
  • repaying hire purchase (HP) or other debts you took out to pay for any of the above.

You can apply for any amount from £100 to £1,500. You must state how much you need when you apply.

Who can apply for a budgeting loan?

You can apply for a budgeting loan if you or your partner has been on income support or income based jobseeker's allowance or pension credit for at least 26 weeks. Short breaks can be ignored - seek advice if you have had any breaks in the 26 week period.

Applying for a budgeting loan

You need to complete form SF500 available at your local Jobcentre Plus office. Budgeting loans are given out by the social fund. Claim forms are also available online at the Jobcentre Plus website.

Repaying your budgeting loan

You will have to pay back what you borrow within 104 weeks. If you are still getting benefit, a fixed amount will be taken out of your income support, jobseeker's allowance or pension credit until the loan has been repaid. You won't get a loan if you will not be able to repay it.

What if my budgeting loan application is refused?

If your application for a budgeting loan is refused, you can ask the social fund 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 social fund does not change its mind when it reviews the decision, you can then ask the Independent Review Service (IRS) to look at your application again. The IRS can change the decision if it was wrong. Visit the IRS website for more information.

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.

Alternatives to Budgeting loans

In some circumstances grants don't need to be repaid, unlike budgeting loans.

More information on budgeting loans

You can find out more about budgeting loans at GovUK.

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