There are many types of crisis loans in the UK. They can be used in an emergency for paying bills and living costs, including fuel, housing expenses, rent arrears and other expenses. Families can apply for crisis loans from their local council as part of welfare or a charity. Another place to get an emergency loan from will be a credit union or some housing schemes may provide them as well to pay a damage deposit or first months rent. Some more details on this type of financial help are below.
Note funds are limited and come with restrictions. The money will need to always be repaid though. The application criteria for each lender will vary. Some of the examples are below:
A council may generally require a family to be on benefits, such as Universal Credit, Job Seekers, or Local Housing Allowance. Or a council may offer a crisis loan to pay for bills in arrears as an alternative to a payday lender. This was aimed at people who are in an emergency and that have poor credit or ability to borrow from other lenders.
Charities in the UK will often provide emergency funds for rent, heating bills or other costs when the family has no alternatives but a source of income. Crisis loans are not widely available (normally vouchers or in kind items are given), but when offered a charity will try to set low interest rates and affordable payment plans. Not-for profit credit unions can provided funds as well to members, and the money is for paying bills, debts, and it also gives free money management classes.
How to get crisis loans
The first place to turn to is a local council. The financial aid can come in two different forms. One is welfare and another may be an emergency loan. Both have their own forms of support provided, whether free food in partnership with Trussell Trust, rent deposits, loans to top up an electric meter, free white goods or more. Find more details here.
- Welfare schemes from a council are generally for families on benefits, no savings, and a low income.
- Crisis loans for paying bills are also offered by some local councils. Find details on council loans for paying bills.
Each council provided financial assistance at their own discretion. Sometimes it is a crisis loan, sometimes free stuff, or they may give grants or just free advice. The schemes vary.
Instead of turning to a bank, payday lender, or high priced lender, credit unions are a great place for loans with a low APR rate. Almost all cities, counties, and boroughs have a credit union in the region. Not only will they provide a crisis or emergency loan for paying bills, but there may be credit card help, budgeting workshops, information on opening savings accounts, and other services. they often work with Citizen Advice as well as the council. Find local credit unions.
Some charities or even churches may provide crisis type loans as well. This sort of funding is limited though, but it is possible. There are organisations such as Five Lamps that offer funds and other local charities may also provide financial aid. But in general a charity gives guidance and basic needs; not loans. For linkage and information, or to try to find a scheme, the Salvation Army financial assistance schemes.
Rent deposit loans are also offered too. These will be for a crisis only for someone who needs safe, affordable housing in the private sector. Councils run these schemes for those that are local to the area. While some use bond guarantees, many use loans. A source of income/job is always required. Find details on loans that help with rent deposits.