How many budgeting loans can I have in a year? If you get certain benefits and need a loan, it may be possible to apply for a budgeting loan or budgeting advance. So, before talking about how many budgeting loans can I have in a year, let’s talk about budgeting loans and how it works.
These loans work in slightly different ways and are available to low-income earners. Although they have yet to be paid, they are much cheaper than the alternatives available from payday lenders because you pay no interest on the money.
Here we take a look at what you need to know about both types of loans.
What Is A Budgeting Loan And How Does It Work?
A budgeting loan is an interest-free personal loan from the government social fund that is available to people on benefits. You can use a budget loan for a variety of reasons when something unexpected and essential pops up, such as:
- Furniture or household items
- Clothes and shoes
- Advance rent payments
- Relocation, renovation or maintenance costs
- UK travel
- Cost of starting a new job
- Maternity or funeral costs
- Repaying Hire Purchase Loans or any loans taken for any of the reasons listed here
You pay no interest on the loan and only have to repay what you have borrowed, which is deducted from the payments.
To apply, you must receive one of the following four benefits for a minimum of six months: income support, means-tested jobseeker’s benefit, jobseeker’s benefits, and means-tested support or retirement credit.
You cannot apply if you receive universal credit, are involved in industrial action or already owe £1,500 or more in crisis loans (which are no longer available to apply for) or budget loans.
What Is A Budgeting Advance And How Does It Work?
A budget advance is a type of loan for those who already receive universal credit. It can be used to pay for any of the following: emergency home repairs, job retention, job search, and funeral expenses.
You must have received universal credit for at least six months to apply unless the money is needed to help you find work or to help you keep your current job.
You can only apply if you have earned less than £2,600 as a single or £3,600 as a couple in the last six months. You cannot get a new one if you have already paid another advance.
There is also a universal credit advance that you can apply for, which is a different type of loan. This loan is for those who are struggling to pay things off and can’t wait five weeks to receive their first universal credit payment.
How Do You Apply For A Budgeting Loan Or Budgeting Advance And How Much Can You Borrow?
Because these two loans are slightly different, you can apply for them in different ways.
- Budgeting Loans: You can apply online at gov.co.uk, by post if you can download a form and return it, or you can call the Social Fund on 0800 169 0140 and ask them to send you any printed form you need.
- Budgeting Advance: For a budget advance, please contact your local Jobcentre Plus job coach to apply.
For both loans, you can apply for between £100 and £812 depending on your circumstances. If you are single you can get up to £348, if you have a partner up to £464 and if you or your partner are claiming child support up to £812.
The amount you receive will depend on whether you can return the money if you save more than €1,000 (or €2,000 if you or your partner are 63 or older) or if you are already paying off a budget or crisis loan.
When Do You Have To Repay The Money?
If you are approved for a down payment or loan, you will be informed when it is due to be repaid.
- Budgeting Loans: These are paid from your benefits and the amount is based on your income and what you can afford. Typically, you must repay the loan in full within two years, and if you stop receiving benefits and do not release the loan, you must repay it in some other way.
- Budgeting advances: Advances are deducted from your universal credit payments and must be repaid within two years if you borrow after April 12, 2021 (or one year if you borrow before that date). The first payment will be made on the day you receive your next universal credit payment after receiving the loan.
If you no longer receive the benefit, you will be contacted about the amount to be refunded. If this is not possible, you must contact the DWP Debt Management Contact Center to set up a repayment plan.
Am I eligible?
Before finding out how many budgeting loans can I have in a year, check your eligibility.
Why? Because not everyone can apply for a budget loan. They are only available to low-income earners who meet certain criteria.
Essentially, you must demonstrate that you have received one of the following benefits in the past six months:
- Pension credit
- Income Assistance
- Income-related benefit for job seekers
- Employment Allowance and Income-Related Support
If you’re on universal credit, you can sometimes get a “budget advance.” This works like a budget loan, but you get less universal credit until you pay the advance.
You cannot get a budget loan if:
- They are currently part of a strike action
- Already owes over £1500 on outstanding budget loans
- Finally, you must apply for a minimum of £100. Your application will be rejected if you apply for a smaller loan.
How Often Can I Request A Budgeting Loan Or Budgeting Advance?
There is no limit to the number of loans you can have, but each time you apply for a new loan or budget advance, your circumstances are evaluated, including any outstanding loans and whether you can repay the new loan.
They are assessed on a case-by-case basis and the amount you receive will depend on several things, including whether you have other loans or budget advances that you are paying.
How much can I request?
Unsurprisingly, there is a limit to how much you can get in budgeting loans.
- Singles have access to £348
- Couples can access £464
If you or your partner apply for child support, you can access up to £812
To be clear, there is no guarantee that you will get the maximum amount. For example, if you have savings, you may get less. You also don’t get more than you can afford.
So how many budgeting loans can I have in a year(12 months)? Let’s see.
How Many Budgeting Loans Can I Have In A Year?
The short answer? There is no fixed limit to the number of budget loans you can apply for in a year. It is assessed on a case by case basis.
That said, you can’t get a new budget loan if you already have too much outstanding. So what counts as “a lot”? Well, that depends on your circumstances.
You will only receive budgeting loans up to the maximum amount to which you are entitled.
In other words, if you’re a single person with a £348 budget loan, you won’t be able to get another loan until you’ve paid off some of it.
A couple with a budget loan of € 232 can receive a second loan of a maximum of € 232.
Someone entitled to child benefit can get several smaller loans up to a total of € 812.
And remember, you can’t get any more budget loans unless the Department of Work and Pensions (DWP) thinks you can handle the payments.
If you need multiple budget loans, it’s probably a sign that you need more help with your finances. It may be a good idea to contact Citizens Advice for free debt advice.
Where can I apply for a budget loan?
You can apply for a budget loan online or fill out an SF500 form and submit it to DWP.
The DWP must decide within 3-4 weeks. If you are offered a budget loan and you accept it, you should receive the money within three weeks.
What if I cannot pay my budget loan?
If you are unable to pay budgeting loans, contact the DWP immediately. They will advise you on what to do next.
Can I get a crisis loan instead?
No, Crisis loans are no longer available.
If you can’t get a budgeting loan, check with your local employment office or contact the Citizens Council to see what else you can apply for.
Conclusion – How Many Budgeting Loans Can I Have In A Year
It comes down to? There is no set limit to how many budget loans you can get in a year. You can have a budget loan up to the maximum claim amount or several smaller amounts up to the same maximum amount. All that matters is that you do not exceed your rights, whether you are single or in a relationship.
If you’re worried about your finances or can’t afford your budget loans, it’s always best to turn to debt counselling sooner or later.