The Department for Work and Pensions (DWP) Budgeting Loan provides interest-free financial help to people on certain benefits who need to cover urgent, essential costs. In 2025, eligible applicants can receive up to £812 depending on their circumstances, with repayments deducted automatically from benefit payments.
This loan is not a grant—it must be repaid—but unlike commercial loans, no interest is charged. It is designed to prevent people on low incomes from turning to high-cost credit.
What the Budgeting Loan Covers
The loan can help pay for essential or emergency costs, such as:
- Household appliances like cookers, fridges, or beds
- Clothing or footwear
- Maternity or funeral expenses
- Rent in advance or removal costs when moving home
- Travel for hospital visits or job interviews
It offers a safer alternative to high-interest borrowing, particularly for those who have no savings to fall back on.
Maximum Loan Amounts
While £812 is the maximum available, the actual amount depends on household size, savings, and any existing Budgeting Loan balance.
| Household Type | Maximum Loan Amount |
|---|---|
| Single claimant | £348 |
| Couple without children | £464 |
| Family with children | £812 |
The DWP assesses affordability before deciding the final loan amount.
Eligibility Criteria
To qualify for a Budgeting Loan in 2025, you must:
- Have been receiving one of these benefits for at least 26 continuous weeks:
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Pension Credit
- Have savings below £1,000 (or £2,000 if over 63)
- Not have large outstanding Budgeting Loan debts
- Use the money for essential expenses
Note: Universal Credit claimants are not eligible, but can apply for a Budgeting Advance instead.
Repayment Terms
Repayments are taken automatically from your benefit payments and set at an affordable rate. Most loans must be repaid within 104 weeks (two years).
| Loan Amount | Weekly Deduction | Estimated Duration |
|---|---|---|
| £400 | £5.00 | 80 weeks |
| £812 | £7.80 | 104 weeks |
If benefits stop before repayment is complete, the DWP will arrange alternative payment options.
How to Apply
You can apply using form SF500, available:
- Online via GOV.UK (fastest method)
- From your local Jobcentre Plus (paper form)
Steps:
- Provide personal details and National Insurance number
- State the amount needed and reason for the loan
- Give details of household income, savings, and debts
- Submit the application online or by post
Most applicants receive a decision within 7–10 working days. If approved, payment is made directly into your bank account within 5–10 days.
Digital Application Benefits
Applying online offers:
- Faster processing and fewer delays
- Ability to track application status
- Quicker payment compared to postal applications
When Payments Begin
Once approved, payment is transferred to your bank account within 5–10 days. Repayments begin automatically from your next benefit payment cycle.
Applying early in 2025 may result in quicker processing times, which can be helpful if planning for large upcoming expenses.
The DWP Budgeting Loan remains one of the most affordable and accessible ways for benefit claimants to manage unexpected costs without high-interest debt.
FAQs
What is the maximum Budgeting Loan in 2025?
Up to £812, depending on household circumstances.
Do I need to pay interest on a Budgeting Loan?
No, it is completely interest-free.
Can Universal Credit claimants apply?
No, they must apply for a Budgeting Advance instead.
How long do I have to repay the loan?
Usually within 104 weeks (two years).
How do I apply for a Budgeting Loan?
Through GOV.UK online or by submitting form SF500 via Jobcentre Plus.
