Crisis Loans

If there is ever a time when a person needs help financially due to an emergency or disaster of some type, he or she may qualify for a crisis loan. Crisis loans are designed to provide aid to people who desperately need financial help and have no other way of obtaining it. It is important to note that the principle of crisis loan will need to be repaid but not the interest. This is a departure from conventional loans which do require the repayment of interest.

There are certain qualifications that a person must meet before they can obtain crisis loans. A person must be 16 years or older They or their family must not have enough money on-hand to take care of their short term needs as a direct result of an emergency and/or disaster. Individuals seeking the loan must be able to prove that they and/or their family will be in danger if they do not receive it.

Crisis loans are limited in what they can be used for. For instance, they can only be used for the following, advance rent, daily living expenses, pre-paid meter fuel debt, hostel residential charges, travel expenses if separated from their home and lodging charges.

Not every emergency will qualify a person or family for a crisis loan. Knowing which ones do and which ones do not will save a person time. Rather than applying for a loan that a person has no chance of being granted, an individual can make better use of their time by dealing with the problem at hand.

Crisis loans may be obtained by people whose homes have been damaged by fire or flood and who have lost important household items as a direct result of either. The loan can be used to replace such items and to cover other expenses. These loans can also be utilized by people who have received a Community Care Grant and are transitioning from a residential or institutional home but can’t come up with enough money to pay advance rent.

Crisis loans are available in varying amounts. This is because they are based on need. A person who applies for a crisis loan will be evaluated based on the circumstances of their emergency, the amount of damage incurred and what a person needs to cover their short-term needs and living expenses. Another consideration is the amount of money an individual has in their savings. People with a lot of money in savings may be turned down for a crisis loan. Those with no or very little money in their savings are more likely to be loaned the money they need. Lastly, a person who applies for a crisis loan will be evaluated on whether or not they currently owe any money to the Social Fund.

Because a crisis loan is just that, a loan, it will have to be repaid. The loan’s repayment terms will be determined by a Jobcentre Plus adviser. They will work with borrower to come up with an affordable repayment plan. People who are on benefit will have the monies taken out of the benefit payments.