DWP loans – how much you can receive and how to apply | Personal Finance | Finance

The rising cost of living crisis is putting a significant strain on personal finances. For those struggling to make ends meet before their next payday, a Budgeting Loan could offer some respite.

This loan, provided by the Department for Work and Pensions (DWP), can help cover essential costs such as advance rent, clothing, and maternity expenses. However, it’s only available to those who have been claiming certain benefits for the past six months.

The qualifying benefits include Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, and Pension Credit. Those currently on Universal Credit are not eligible for this loan.

However, if you transitioned from Universal Credit to Pension Credit, your time spent claiming the latter will count towards the six-month requirement. Your eligibility might be affected if you’re already repaying an existing Budgeting Loan or Crisis Loan.

How much you could get

It’s crucial to remember that any money received from a Budgeting Loan must be repaid, so it should be considered a temporary solution. As per gov.uk, the minimum amount you can claim with a Budgeting Loan is £100.

You could receive up to £812 if you or your partner claim Child Benefit. If you’re single and don’t claim Child Benefit, the maximum you could get would be £348, which increases to £464 if you have a partner.

The amount you receive will also depend on your ability to repay the loan and the balance in your savings. A significant benefit of a Budgeting Loan is that it’s interest-free, meaning you only have to pay back the amount borrowed.

Repayments are automatically taken from your benefits, with the repayment sum determined by your income and affordability. The government suggests that repayments should be finished within two years of issuing the loan.

You can apply for a Budgeting Loan on gov.uk here.

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