DWP Provides Interest-Free Loans Up to £812 – How You Can Apply

UK households facing financial difficulties may be able to get loans of up to £812 this year. The Department for Work and Pensions (DWP) offers various budgeting loans to help people cover costs like furniture, rent, and even funeral expenses.

Everything You Need to Know About Eligibility and Benefits of DWP Budgeting Loans

DWP loans come without interest, so you only have to repay the exact amount you borrowed, unlike most other loans that include interest charges. Only some categories of people, including those receiving Universal Credit, will be eligible for the funds.

The DWP explains on its website that in order to be eligible for a budgeting loan, you have to have received one or more of the following benefits for the previous six months:

• Income support
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Pension Credit — if you moved from Universal Credit to Pension Credit. Any time spent claiming Universal Credit will count towards the six months.

However, you become ineligible for a budgeting loan if:

• You claim Universal Credit.
• You claim new style Jobseeker’s Allowance or new Style employment and Support Allowance.
• You part-take in any form of industrial action.
• You have a total debt of more than £1,500 from crisis loans and budgeting loans.

A budgeting loan can help cover costs like furniture or household items, such as washing machines, as well as clothes and shoes. It can also be used for rent in advance, moving expenses, home repairs or security improvements, and travel within the UK. The loan can assist with job-related expenses, maternity costs, and funeral expenses. Additionally, it can help you repay hire-purchase agreements or loans taken out for any of these items.

Minimum Borrowing Amounts and Eligibility Requirements

The minimum amount you can borrow is £100, and you could borrow more, depending on your situation, you can for instance £348 if you’re single, £464 if you have a partner and £812 if you or your partner claim Child Benefit.

The amount you can borrow depends on a few things. These include your ability to repay the loan, whether you have savings over £1,000 (or £2,000 if you or your partner are 63 or older), and if you're already repaying a budgeting loan or crisis loan.

Budgeting loans are usually paid into the same account as your benefits. If you want the money to go into a different account, you can either update the account your benefits are paid into before applying or apply using a paper form, which takes longer than applying online.

Interest-Free Repayment Process

According to the DWP: “A budgeting loan is interest-free, so you only pay back what you borrow. The repayments will be taken automatically from your benefits. The amount you repay is based on your income - including any benefits you receive — and what you can afford.”

After applying, you’ll receive a message by email, text, or letter to let you know if you’ve been offered the loan. It will also explain how much you’ll need to repay each week if you decide to accept it.