Budgeting Loans (BL) are government-funded loans provided to individuals receiving benefits from the Department for Work and Pensions (DWP) in the United Kingdom. The purpose of the loan is to provide financial assistance to individuals to help them meet one-off, essential and/or emergency costs that they are unable to meet from their existing income and savings. This includes costs associated with housing, such as rent deposits, furniture and white goods.
The scope of Budgeting Loans (BL) covers both short-term and long-term loans. The short-term loan is for a period of up to six months, and the repayments are deducted from the individual’s benefit. The long-term loan is for a period of up to three years, and repayments are made directly to DWP. The loan amount is determined by the individual’s circumstances, such as their income, savings and other commitments, and the loan must be repaid in full.