As the cost of living crisis continues to soar, many households can't afford to fork out for essential replacements like washing machines, if they break suddenly.
With energy bills and prices on everyday essentials soaring, many people are unable to handle additional, unexpected costs such as appliances breaking down.
However, Birmingham Live reports that if you are on some Department for Work and Pensions (DWP) benefits, you could be eligible for a budgeting loan.
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These loans can help you cover costs if you’re struggling - so here’s what you need to know about them.
What is a budgeting loan?
A budgeting loan, delivered by the DWP, can help households pay for essentials if they can't afford to do so.
The cash has to be repaid over two years, with no interest added. This means that claimants are only required to pay back the same amount they’ve borrowed, via deductions from their benefit payments.
What can budgeting loans be used for?
These loans can help people pay for a range of essential items, and deal with emergency costs.
These include the following, according to the UK Government’s website:
Furniture or household items (including white goods such as washing machines)
Clothes and footwear
Rent in advance
Costs associated with moving house
Home maintenance, improvement and security costs
Travelling expenses within the UK
Costs associated with getting a new job
Maternity costs
Funeral expenses
Repaying hire purchase loans
Repaying loans taken to cover the costs listed above
How much can you receive as a budgeting loan?
If eligible, people can receive up to £348 as a budgeting loan if you’re single, £464 if you’ve got a partner or £812 if you and your partner claim Child Benefit.
The minimum amount available is £100. However, how much you can borrow as a budgeting loan will depend on other factors, which include:
your ability to repay it
whether you’re repaying an earlier budgeting loan or crisis loan
whether you have savings of more than £1,000 (or £2,000 if you or your partner are aged 63 or over)
Who can apply for a budgeting loan?
You can apply for a budgeting loan if you’ve been on some DWP benefits for the last six months. These benefits are as follows:
Income Support
Income-based Jobseeker’s Allowance
Income-related Employment and Support Allowance
Pension Credit
For claimants who’ve been moved from Universal Credit to Pension Credit, any time you spent on Universal Credit will count towards the six-month period required for a budgeting loan.
Those on Universal Credit cannot get a budgeting loan but a similar payment called a budgeting advance is available instead. It has to be paid back within a shorter period of 12 months.
You can apply for the loan online on the DWP website. Alternatively, you can fill out a paper form.
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