Crisis Loan

A Crisis Loan is a government loan given by the Social Fund to cover emergency expenses, often following a disaster, designed for individuals without no alternative source of financial help. You won’t be charged interest for this loan to prevent you from getting into excessive debt.
To be eligible for a crisis loan you must be:

  • over 16 years of age
  • without enough financial means to pay for basic living costs which could bring about a serious threat to the health and safety of you or/and your family
  • without enough financial means to pay for something else, which is vital for the health and safety of you or/and your family
  • without other means of help (credit cards, loans from friends or relatives, or charitable help).

Crisis loan can be paid off through deductions from your Income Support/ Income based JSA or from some other benefits you may have. In case you are not receiving any benefits, you can pay off the loan by instalments or by a lump sum.

As a rule, the loan must be repaid on a weekly basis over a maximum of 78 weeks. In rare cases borrowers are given the chance to repay the loan over the period of 104 weeks. There is also a possibility of having your repayments nullified if you have many other debts.
Even though the debt to the Social Fund must not exceed £1000 and usually only one loan can be taken out at a time, there are cases when someone in need gets more than one loan at once. The exact loan amount depends on your personal circumstances, personal savings and how much money you have to repay the government as a result of other loans of this kind, for example, Budgeting Loans. However, the most important thing that will be taken into consideration is your emergency needs.
 
You will be told whether your application for crisis loan is accepted either on the spot or by telephone within one working day.
In case your application was refused, you have a right to ask for the decision’s review and then you will have an interview where you can give more reasons or evidence which would confirm that you really need the loan. If a Social Fund Officer thinks you are not eligible for the loan, the decision will be passed on to the Social Fund Manager. If you still don’t get a satisfactory result, you can ask your case to be reviewed by Independent Review Service for the Social Fund. A Review can decide to turn a loan into a Community Care Grant. If you apply for a Community Care Grant and are offered a Loan, you can take out the loan while waiting for the review Process to be accomplished. Note that there is always the risk that your application for a Grant will be rejected and you will ultimately have to repay the loan.


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