This interest free UC loan scheme could be the answer to festive money worries

Paying for the Christmas can be tough, but there could be relief for those who qualify for an interest free loan.

Universal Credit claimants who are still waiting for their first payment to come through could be eligible for interest free loans of up to £1,000.

Many Universal Credit claimants are struggling because the temporary uplift given during lockdown was taken away in October, especially with increased food and energy costs.

With some people facing a five-week wait for the money, this loan scheme could help pay for bills.

Here's everything you need to know about borrowing from the scheme…

Who is entitled to the Universal Credit emergency loan and how much can you get?

This advance payment scheme is currently being offered via the Department for Work and Pensions (DWP).

It means claimants can borrow money and then pay it back in instalments.

Anyone waiting for their first payment to come through under Universal Credit is eligible for this scheme.

The loan can also be accessed by those who need more money due to a sudden change in circumstances, like having a baby, MyLondon reports.

The amount a claimant can get is dependent on how much Universal Credit they are entitle to, but the maximum amount they can currently borrow is £1000.

Claimants have the option to ask for 100 per cent of this amount or ask for less.

Those who wish to make a claim can apply through JobCentre 0800 328 5644, and those making applications for a change in circumstance should do so over the phone.

Do you pay interest on the Universal credit emergency loan?

These loan are interest-free and the borrowed money should be with claimants within three days of making a claim, but they need to make the money lasts them five weeks until the UC payment comes through.

You can work out the money deducted from your next UC payment by dividing the full cost by 24.

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When does the loan need repaying by?

When applying for the loan, applicants need to explain their reasons for the loan and also prove their ability to pay back the cash, agreeing upon the rate at which the loan will be repaid. Claimants who get a job and stop claiming UC will still have to repay the loan.

Anyone struggling to repay an advance can pause a repayment for up to three months or one month for a change in circumstances.

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