Benefit claimants can get interest-free DWP loan to help pay for necessities including clothes or footwear

The cost of living crisis is continuing to place an immense amount of pressure on people's personal finances. If you're struggling financially before your next payday, a Budgeting Loan can help you pay for some essential goods, including rent in advance, clothing, and maternity.

The loan, which is offered by the Department for Work and Pensions (DWP), is only available to benefit claimants who have been claiming for the past six months. Furthermore, only certain benefits qualify for the loan, including the following:

• Income Support

• income-based Jobseeker’s Allowance

• income-related Employment and Support Allowance

• Pension Credit

While those currently claiming Universal Credit are not eligible for the loan, if you moved from Universal Credit to Pension Credit, then the time you spent claiming the latter benefit will count towards the six months requirement. Your eligibility may also be damaged if you are already paying back an existing Budgeting Loan or Crisis Loan.

How much you could get

It's important to highlight that the money you get from a Budgeting Loan will need to be paid back and should therefore be seen as a temporary relief. According to gov.uk, the lowest you can claim with a Budgeting loan is £100.

However, you could get as much as £812 if you or your partner claim Child Benefit. If you're single and don't claim Child Benefit, the maximum you could get would be £348 which increases to £464 if you have a partner.

The amount you receive will also depend on your ability to pay the loan back and how much you have in your savings. One of the key benefits of a Budgeting Loan is that it's interest-free, therefore, you will only need to pay back the amount you borrowed.

Repayments are automatically taken from your benefit, with the amount being paid back based on your income and what you can afford. The government advises that repayments must be made within two years of the loan being given out.

You can apply for a Budgeting Loan on gov.uk here.