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Government Loans for People on Benefits

Government loans for people on benefits are normally available from Directgov (or Jobseeker's Direct and any office part of the Department of Work and Pensions). Aside from grants and schemes, only two loans are available: crisis loans and budgeting loans, which are normally repaid from the benefits a person receives with no interest. However, as government loans are normally taxpayer funded there is a limited available for each loan and loans are only given to people who meet strict eligibility criteria.

 

Crisis Loans

Crisis loans are given to people who don't have enough money to meet their short term financial needs. No interest in paid on a crisis loan and, if the borrower is on benefits, the loan is normally deducted from the bi-weekly Jobseeker's Allowance received. You must be over 16 to receive a crisis loan and prove that you may be in serious danger (or your family will be) if you do not obtain the loan. Receiving benefits do not affect your eligibility for the loan. The amount which can be borrowed depends on individual circumstances but is normally a small amount in most cases. You can review the criteria for a crisis loan at:

 

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_10018856

 

Budgeting Loans

Anyone (or their partner) who has been receiving benefits for 26 weeks or more can apply for a budget loan. Budget loans are intended as government loans for people on benefits to purchase essential household items, clothing, travel expenses, maintain or improve a home or advance rent expenses. You can borrow between £100 to £1,500, but the final loan amount will depend on the personal circumstances, savings and all income (including you or your partner's benefit allowance). The loan is automatically deducted from benefits over a 104 week period when it has to be repaid. You can view details of budgeting loans at:

 

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_10018905

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