You might have heard about the budgeting loan; if not, you are here on the place as we are going to discuss the meaning of budgeting loans, how they work, and much. If you are curious to know all about it, stay tuned with us until the end of the article.
What is A Budgeting Loan
If you are on a Universal Credit, it is also called a Budgeting Advance. It is known for the service of borrowing money with any interest from £100-812. You can also check out how to calculate universal credit.
If you want to do repayment, then it is mainly taken on its own from the payments of regular future benefits. Basically, it is introduced to help you in paying the unexpected and essential expenses. Now, let us discuss how it works:
How does it Work in the UK
A budgeting loan is a service that helps pay for the following expenses. Have a look:
- household items like washing machines or furniture
- footwear or clothes
- advance rent
- costs related to shifting house
- improvements, maintenance, or security for renting or purchasing a home
- cost of travel within the UK
- costs related to having a new job
- funeral costs
- maternity costs
- hire purchase loan repayments
- repayment of the loan, if taken for the items mentioned above
- Now, Crisis Loans are not mentioned any more.
If you have been on certain benefits continuously for six months, then you are eligible for the Budgeting loan process.
You should know that repayments are taken on their own automatically out of the benefits, and you have to repay the amount that you have borrowed.
Amount you can borrow
The minimum amount of loan you can take is £100, and the maximum limit depends upon the situation of your living. Like:
- Being single- £384
- Being spouse- £464
- Having children- £812
If you have savings of more than £1,000, then you could get less or are able to pay back the existing Crisis Loan or Budgeting.
Repay advances or budgeting loans
Repayments are available only if you take any loan.
Repayments are worked out when you take out the loan. This amount of loan is deducted from your benefit payments until you settle it on your own.
You have to pay it back within one year of the time period you have budgeted in advance and two years for the budgeting loan; all it depends on the amount you borrow.
If you do not get any benefit payment but you are still in the process of repaying the loan, you will have to arrange another mode to settle the payment.
If you are in a condition where you cannot afford the repayments, in that case, you ask for any other plan of repayment to be agreed upon. Remember that it is important for you not to get into any debt that tries to settle down the loan.
Who is eligible for a Budgeting Loan
If you are willing to take a budgeting loan, then you can apply for it if you have been claiming the given benefits for a minimum of 6 months:
- Income Support
- Pension Credit
- Income-related Support or Employment Allowance.
- Allowance for Income-based Jobseeker
|What is Universal Credit? How to Claim Universal Credit, Benefits & Eligibility
|Universal credit log in: How do I sign into my account?
|Universal Credit Calculator- How much will I receive?
People May Also Ask
How many budgeting advances can I have?
You cannot get a second Budgeting Advance before you have fully paid off the first, so even if your first advance was for less than the maximum amount, you cannot ‘top up’ your advance to the full amount.
What are the three main purposes of budgeting?
Planning, controlling, and evaluating performance are the three primary goals of budgeting. Planning: Budgeting is a planning tool that enables businesses to establish quantifiable financial targets for the future. They are able to prioritize tasks and allocate resources more wisely as a result.