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Government Crisis Loans and Repayments

By: Garry Crystal - Updated: 12 Jul 2010 | comments

Government crisis loans and repayments are interest free and available to anyone over the age of 16. The crisis loans can be obtained regardless of whether the applicant is receiving government benefits or not. However, there are strict stipulations that must be met before a crisis loan will be granted.

Government Crisis Loans

Government crisis loans are available from the Social Fund and are provided in case of some form of personal emergency or disaster. Anyone living in Britain over the age of 16 who cannot receive help in any other way can apply to the Social Fund for a crisis loan. There are stipulations regarding the reason for the loan and these can include:

The applicant is unable to pay their basic living costs and it is deemed a health or safety risk to the applicant or their family.
The applicant needs money for something they are unable to pay for that would also be risk to the applicant or their family.
The applicant needs help to pay rent to a landlord who is not a local authority landlord.
The applicant is receiving a Community Care grant in order to become established into a community.

Government Crisis Loan Repayments

Government crisis loan repayments are expected to be repaid over a set period of time. If the applicant is receiving benefits then the repayments can be deducted from their benefits either fortnightly or weekly. Applicants that are not receiving benefits can repay the money directly to the Department for Work and Pensions by cheque, cash, or debit card.

Although government crisis loans can be repaid in very small amounts non repayment is not a wise move. The Department for Work and Pensions will pass on any defaulted loans to debt collectors who may then add on their own fees. In most cases these debts will not be recorded on credit references but debt collectors can do this if payments are not made.

Crisis Loan Amount

Government crisis loans and repayments are variable depending on the circumstances of the individual. The amount the applicant will receive will depend on a number of factors including any savings they may have. The Social Fund will also want to know how the applicant is going to pay back the loan before they will make their decision to grant the loan. The applicant can state a certain amount that they need but there is no guarantee they will receive the full amount.

Government crisis loans are usually paid by cheque, which will be sent to the applicant’s home address. The cheque can then be paid into a bank or building society account or cashed at a post office.

Where to Apply

Government crisis loan applications can be obtained from Social Work Departments, Jobcentre plus offices and the Department for Work and Pensions. If the applicant wishes to download an application then they can log onto the Department for Work and Pensions website. Proof of identity will be needed when applying for a government crisis loan and official documents may be needed before any loans can be granted.

Government crisis loans are useful if there is an unexpected emergency and funds cannot be obtained elsewhere. However, these loans are not simply available to everyone, and it is the government’s decision who will be granted a crisis loan.