People on very low incomes may qualify for interest-free loans from the government.People on low incomes will soon be able to access affordable loans more easily after changes to the Social Fund were announced today.The Social Fund is a system of grants, loans and payments to help people to meet necessary expenses that are hard to pay for out of regular income. It provides different types of help depending on the circumstances people are in and most are only available to those on specified qualifying benefits such as Income Support, income-based Jobseekers Allowance or Pension Credit.The main one of interest is the Budgeting Loan and as long as you qualify you can apply for an interest-free loan for any of the following:Furniture and household equipmentClothing and footwearRent in advance and/or removal expenses to secure fresh accommodationImprovement, maintenance and security of the homeTravelling expensesExpenses associated with seeking or re-entering workHire Purchase and other debts for expenses associated with any of the aboveNow since most people run up debts because of the above, it follows that any qualifying person having trouble meeting the bills should be able to apply for an interest-free Budgeting Loan.Payments are discretionary and the scheme is administered by Jobcentre Plus. Until now you weren't able to borrow more than £1,000 but now there will be three maximum rates for single people, couples and families with children. All eligible applicants will be able to borrow up to the maximum appropriate for their family composition. However, as the scheme has limited funds the rates won't be set in stone, although the maximum limit will now be £1,500.Before you get any money you'll have to agree how you will pay the loan back. The standard repayment period is to be extended from 78 weeks to 104 weeks or, where a customer has particular difficulties, from 104 weeks to 130 weeks. Repayments are usually taken off your Income Support, income-based Jobseeker's Allowance or Pension Credit.Alternatively, if you need immediate help with day-to-day living costs or something else in an emergency, you may be able to get a Crisis Loan. You don't need to be in receipt of benefits in order to qualify for this one but whether you'll get a Crisis Loan will depend on your particular circumstances.
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