DWP offers interest-free loans of up to £812 - how to claim

UK households struggling with their finances could be eligible for loans worth up to £812 this year. The Department for Work and Pensions (DWP) has a number of different budgeting loans available to help people pay for things such as furniture, rent and even funerals.

Unlike the majority of other loans, the DWP loans are interest-free - meaning you only pay back what you borrowed.

However, only specific groups of people will be eligible for the money, with those who claim Universal Credit among those who don't qualify.

On its website, the DWP explains that to get a budgeting loan you must have been getting one or more of these benefits for the past six months:

• Income support
• Income-based Jobseeker's Allowance
• Income-related Employment and Support Allowance
• Pension Credit - if you moved from Universal Credit to Pension Credit, any time spent claiming Universal Credit will count towards the six months.

But you cannot get a budgeting loan if:

• You get Universal Credit
• You get new style Jobseeker's Allowance or new Style employment and Support Allowance
• You're involved in industrial action (for example a strike, walkout or lockout).
• You owe more than £1,500 in total for crisis loans and budgeting loans.

A budgeting loan can help pay for:

• Furniture or household items (for example, washing machines or other 'white goods')
• Clothes or footwear
• Rent in advance
• Costs linked to moving house
• Maintenance, improvements or security for your home
• Travelling costs within the UK
• Costs linked to getting a new job
• Maternity costs
• Funeral costs
• Repaying hire purchase loans
• Repaying loans taken for the above items.

How much could you get?

The lowest amount you can borrow is £100. You could get up to:

• £348 if you're single
• £464 if you have a partner
• £812 if you or your partner claim Child Benefit.

How much you could get depends on whether you:

• Can pay the loan back
• Have savings of more than £1,000 (£2,000 if you or your partner are 63 or over)
• Are paying back an existing budgeting loan or crisis loan.

Budgeting loans are paid into the same account as your benefit. If you want to be paid into a different account, either:

• Change the account your benefit is paid into before you apply
• Apply using the paper form (this takes longer than applying online).

Paying back the loan

"A budgeting loan is interest-free so you only pay back what you borrow," the DWP says. "The repayments will be taken automatically from your benefits. The amount you repay is based on your income - including any benefits you receive - and what you can afford."

After you apply for a budgeting loan, you'll get an email, text or letter telling you if you've been offered a loan. This explains how much your weekly repayments will be if you accept the loan.

You normally have to repay the loan within two years (104 weeks).

If you stop getting benefits you'll get a letter from DWP Debt Management explaining how to repay and manage benefit money you owe. You can pay back the loan in full or set up regular monthly payments.

For more information or to apply visit gov.uk/budgeting-help-benefits/how-to-apply.