Budgeting Loan repayment seems high.

harveybobbles

Just been speaking to a friend who has been accepted for a BL of £500. But they repayment is £25 per week. Seems a lot?

I know it has to be paid back within 102 (104 weeks?)

Can they ask for it to be taken over 52 weeks?

Horseunderwater

Are you sure that you have that right. When I do it based on weeks it is 20 weeks. £500/52 = £9.62/week or £4.81 if over 104 weeks. I think it is more likely to be £25/mth over 20 months.

AsknAnswer2

I've seen it being higher. When repayments are worked out, they take all of the claimants income into account (this includes their JSA/ESA/IS or PC and their CTC and CHB). They then set the repayment at a set percentage of the total weekly income - usually 5%, 12% or 20%.

To qualify for a budgeting loan of £500 then it must be a person who is a family unit that has claimed.

Taking the example of a person with the lowest income (a lone parent with one child) they would be receiving in the region of £158 per week - including all the aforementioned income. Applying the highest deduction of 20% of that income would work out at £31.60 per week.

Even if it is higher than you've seen before, it's still within the allowable rates.

You can't ask them to reduce the repayment rate before accepting the loan. They have offered the loan based on the income available for repayment (and reasonable commitments declared on the form will have been taken into account) and if they were willing to offer another rate they would have offered an alternate rate (sometimes they will offer different rates, and you tick the box that is better suited to you).

So the short version is that either you accept the offer or you decline it. If you accept and your financial circumstances change in the future, you can ask for the repayment rate to be looked at again.