Tenant Hardship Loan Fund

Find out if you can apply for help from the Tenant Hardship Loan Fund. The loan is available for private tenants and social housing tenants and the loan is interest-free.

This loan is directed towards people who have had their finances impacted by the coronavirus (COVID-19) pandemic and do not have other means of support.

Many tenants are entitled to non-repayable help, like Universal Credit or Discretionary Housing Payments. Where such help is available this is likely to be a better option.

Things to consider

The loan is directed at people in both social rented and private rented housing who don’t qualify for other help. You will need to pay the loan back so if you might be entitled to other non-repayable help towards your rent then this is likely to be a better option for you.

The loan might be a good option if you know that your drop in income is only temporary – and if you are confident that your money issues will improve soon.

Or your money issues might already be better, but due to a previous drop in your income during the pandemic, you’ve accrued some arrears and your worried your landlord might try to raise eviction action.

Alternatives to the loan

Before you consider applying to the loan fund you should check to see if there are other non-repayable forms of support available. For example:

Universal Credit can include a housing element, which helps towards rent. This element replaces what was known as “housing benefit”. It can be paid to people who are:

• in work but who have low earnings, or

• if you are out of work or in receipt of other benefits.

Tenants who already get Universal Credit or the older type of Housing Benefit can apply for Discretionary Housing Payment (DHP). This is extra money if you might be able to get if you are behind with your rent or if your benefit payments don’t cover the full cost of your rent. If you apply for Discretionary Housing Payment and it’s refused or isn’t enough to clear the arrears you can still apply to the Tenant Hardship Loan Fund later.

See the page on Discretionary Housing Payment to find out how you can apply.

The Scottish Welfare Fund helps families and people in Scotland who are on low incomes through Crisis Grants and Community Care Grants. These grants, though they do not cover rent payments, can be given to cover the costs of an emergency, or if your circumstances have changed, for example, if you have recently left care.

Speak to your landlord

If you are managing to pay your ongoing rent and can afford to make regular payments towards your arrears, you could speak to your landlord and ask them to agree to a repayment plan. If you do this make sure the amount you offer to pay is affordable and try to get any agreement in writing.

If you’re not sure how to work out how much you can afford to offer there is a link to a budget planner tool further down the page.

If you agree to a repayment plan with your landlord, you can still make an application for the loan later if you need to.

Limits on borrowing

You can borrow up to 9 months’ worth of rental payments and up to 3 months' of this can be for ‘future rent due’. So, for example:

• 9 months of rent arrears, or

• 5 months of rent arrears, or

• 4 months of rent arrears + 3 months of future rent payments, or

• 7 months of rent arrears + 2 months of future rent payments

But you wouldn’t be able to borrow for 2 months of rent arrears + 4 months of future rent payments because this would be more than 3 months of ‘future rent’ .

You can only use the loan to pay for arrears that accrued after 1 January 2020.

If you had any rent arrears before 1 January 2020 you may still be eligible to apply, but the loan will only cover arrears accrued after this date.

Repayment terms

There is no interest payable on the loan and repayments will be made in 60 monthly instalments (five years). You can pay the loan back earlier than this if you want to.

Your monthly loan payments = total amount borrowed divided by 60.

During the application, you will need to show you can afford to make these repayments. See the section below on affordability.

Check if you're eligible

You can apply for the loan if you are a private tenant or if you are a social housing tenant, such as a council or housing association tenant.

You also need to be able to show that you can afford to repay the loan. Work out your monthly budget and make sure you have enough left over each month for the loan repayments.

See the page on rent arrears for more advice on your options if you are not eligible for the loan.

Application process for the loan fund

Applications for the fund are made online through the Tenant Hardship Loan Fund website.

You must be the tenant of the property.

You will need to confirm that you have sought advice and to confirm that you have 'investigated and applied for other support if this is available'. If you’re not sure yet whether any other support is available make sure you check before you apply.

You will be asked to provide your details, information about your money coming in and any outgoings you have such as food costs, bills or debts. This information will be used by the fund administrator to assess whether the loan is affordable.

A credit check will be carried out.

You need to provide details about your rent and any rent arrears. You will also need to give your landlord’s contact details (or letting agent details). They will be contacted by the fund to confirm the arrears and monthly rent costs.

Your landlord will also be asked to agree that during the period where the rent costs are covered by the loan, they will not take action to evict you on the following grounds:

• rent arrears

• landlord or their family member requiring to live in the property

• landlord intends to sell

• landlord intends to use the property for a purpose other than housing

If your landlord has already begun action to evict on any of the above grounds, they must confirm they will cancel this.

If the loan is granted

You can decide whether to make the payment directly to your landlord or to have it paid to yourself. If the payment is made to you, you'll be required to pass it onto your landlord within a stated timescale and you will need to provide the fund with confirmation that you have done this.

Key terms of the loan

• There is no interest payable on the loan

• The first repayment of the loan is automatically deferred for six months from the date payment is made

• After this, the loan repayments are due in 60 monthly instalments

• The loan can be repaid in full at any time