If you’re already getting certain benefits and need a loan, see if you can apply for an interest-free Budgeting Loan from the Social Fund. This can be much cheaper than paying high interest charges for borrowing from payday or doorstep lenders. This page tells you how Budgeting Loans work and how to apply for them, including information about Budgeting Advances if you’re on Universal Credit.

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What is a Budgeting Loan?

A Budgeting Loan helps you pay for an essential or unexpected expense if you’re on a low income. It can be used for a wide range of things, including:

  • furniture or household equipment
  • clothing or footwear
  • advance rent or removal expenses for a new home
  • travelling expenses
  • things to help you look for or start work
  • improving, maintaining or securing your home
  • maternity or funeral expenses.

Other help with maternity expenses

If you’re expecting your first child or you’re expecting more than one baby and already have children, you might be able to claim a £500 SureStart maternity grant instead. You don’t have to pay this back.

Find out more about SureStart maternity grants in our guide Benefits and entitlements to claim when you’re having a baby.

Other help with funeral expenses

If you are getting certain benefits and have to pay the funeral expenses of a relative or close friend, you might be able to apply for a Funeral Payment.

Find out more about Funeral Payments and whether you qualify on the GOV.UK website.

Can I get a Budgeting Loan?

You can apply for a Budgeting Loan if you’re getting one of these benefits:

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

You must have been claiming for at least 26 weeks, either consecutively or with a break of no more than 28 days.

The minimum amount you can ask for is £100, but there are maximums based on your household circumstances:

  • £384 if you’re single
  • £464 if you’re part of a couple
  • £812 if you have children.

Some things affect the amount of loan you can ask for, like:

  • existing Social Fund loans
  • savings over £1,000 (or £2,000 if you’re 63 or over).

How to apply for a Budgeting Loan

You can apply online on the GOV.UK website. This option isn’t available in Northern Ireland.

You can also download, print and fill in Form SF500 from the GOV.UK website.

Or ask for the form at your local Jobcentre Plus (or Jobs and Benefits Office in Northern Ireland).

Find your local Jobcentre Plus on the GOV.UK website.
If you’re in Northern Ireland, find your local Social Security or Jobs and Benefits Office.

Paying back a Budgeting Loan

Loan repayments are interest-free and worked out at the time your loan is agreed.

Depending on the amount you borrow, you normally have to pay it back within two years.

Repayments are usually automatically taken out of your benefits.

If you stop getting benefits while you’re paying back the loan, you’ll need to agree another way to pay the money back.

If you have a loan but can no longer afford the agreed repayments, ask the office that paid you to work out another repayment plan. It’s important you don’t get into debt trying to pay off the loan.

What is a Budgeting Advance?

If you’re claiming Universal Credit you should claim a Budgeting Advance instead of a Budgeting Loan. This is the equivalent of a Budgeting Loan for people who are claiming Universal Credit.

To get a Budgeting Advance you must:

  • have been getting Universal Credit for at least six months – unless you need the money to help you get a job or keep an existing job
  • have earned less than £2,600 if you’re single (£3,600 if you’re in a couple) in the past six months
  • not be paying off another Budgeting Advance.

You will usually have to start paying back your Budgeting Advance out of your next Universal Credit payment and pay it back within 12 months.

Ask your work coach at your local Jobcentre Plus about how to claim a Budgeting Advance.

The minimum amount you can ask for is £100, but there are maximums based on your household circumstances:

  • £384 if you’re single
  • £464 if you’re part of a couple
  • £812 if you have children
Find out more about Budgeting Advances on the Citizens Advice website.

Other help you can get

Local authorities in England and the devolved governments in Scotland, Wales and Northern Ireland can provide help and support in an emergency.

Help if you’re waiting for your first benefit payment

If you need money while you’re waiting for your first benefit payment or because you have had a significant change of circumstances, ask your Jobcentre Plus (Jobs and Benefits Offices in Northern Ireland) about a short-term benefit advance.

If you’re waiting for your first Universal Credit payment, you can ask for a Universal Credit Advance instead.

Read more in ‘Benefit payment advances and Budgeting Loans’.
Find your local Jobcentre Plus on the GOV.UK website.
If you’re in Northern Ireland find your local Social Security or Jobs and Benefits Office on the nidirect website.

This article is provided by the Money Advice Service.