Finance

Financial Assistance through a Budgeting Loan

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If you are in the process of considering your financial options in terms of acquiring credit, you may be on the verge of signing up for a new credit card, a payday loan, or a different type of credit. It is always worth looking into all options open to you, as it might be difficult to gain credit if you are already living on a strict budget, or you do not have a job currently. If you do have a lack of employment or poor credit there are fewer options open to you. There is a chance to take advantage of the services of some payday loan providers that can offer bad credit loans over a short-term basis, or you could look to budgeting loans and budgeting advances if you are already living with certain benefits.

A budgeting loan helps you to pay for essential items, or unexpected bills when you are living on low income. This could include removal expenses and upfront rent when moving to a new home, furniture, household equipment and clothing, travel expenses, maternity or funeral expenses, and funds to help you look for and secure new work.

You can apply for a budgeting loan through your local authority, and as long as you have been claiming benefits of some sort for at least a period of 26 weeks. You can apply for a minimum of £100, if you are claiming for one of the following benefits:

  • Pension Credit
  • Income Support
  • Jobseeker’s Allowance
  • Income-related Employment and Support Allowance

Loan repayments are interest-free and you will be fully informed of the exact amounts and repayment dates prior to agreeing to the loan. In most cases an individual will have two years in which to pay back the full loan amount, with repayments automatically taken out of future benefits. If you stop claiming benefits before the loan has been paid off in full you will have to arrange a different way to pay back the debt.

If you claim Universal Credit you can claim a budgeting advance, which is awarded to those that have been getting Universal Credit for at least 6 months, those who are not paying off another budgeting advance, and those who have earned less than £2,600 in the past 6 months (£3,600 for those living in a couple). A budgeting advance is just the equivalent of a budgeting loan for those on Universal Credit.

If you are living on benefits and require some further financial assistance there is help available to you through budgeting loans and budgeting advances. Alternatively, if you are short of cash and have poor credit, certain responsible payday loan providers will be able to offer you an adverse credit loan, should you be able to demonstrate that you can afford to pay back the loan, through your employment or future employment. Always be fully aware of the detail with any form of credit that you take out, ensuring that you are able to pay back a loan within the agreed parameters, and not getting in further financial difficulty.

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