Borrowing while on benefits. Is this allowed?

Mojisola

alano1963 wrote: »

I just want to know if its allowed or will they say it is savings and take it (bit by bit) off me so I won't get the repairs and will be left 15000 in debt for nothing.

The only sure way to proceed is to ask for an answer in writing from the DWP. If they won't put it in writing that it won't affect your benefits, don't take out the loan.

alano1963

Yes my payments would be under £300pm for 5 years. (They have already told me this). So did they take money off your benefits? I will be using the money right away. Does that mean that by the next month I would be back to normal payments? I couldn't afford to lose it for more than that AND pay the loan back. Did you actually check with them / ask? Thanks for your response. It was very helpful.

nannytone_2

be varefuk about saying you aren't unemployed.

were you offered the loan on the basis of you telling the bank that you were not unemployed?
there was a thread on here a dew weeks ago regarding a person that had declared themselves to be a 'home maker' rather than saying they were receiving an out of work benefit ( ESA is an out of work benefit)
the fact that you receive an out of work benefit makes you unemployed, regardless of the reason for the unmployment

HappyMJ

alano1963 wrote: »

I am disabled not unemployed. My disability payment is enough to pay the repayments. I am not worried about that but what I cant do is pay it all out in one go (because I am on benefits and have no savings). We don't drink and don't smoke or anything like that so we can cover our payments. I can afford to borrow money to fix our wrecked house but I'm not going to get into debt if there is no point. I am ill enough without having the worry of the debt for no reason. I just want to know if I will get in trouble or penalised for the few days the money is at £15000 in the bank. Please don't discriminate against me. I have worked all my life until now but now I can't. If I were unemployed I would wait till I got a job but my disability will not ever go away so I can never ever do the repairs to my home without borrowing. I just want to know if its allowed or will they say it is savings and take it (bit by bit) off me so I won't get the repairs and will be left 15000 in debt for nothing.

How about borrowing the money in £5,000 instalments? That amount would not affect your benefits at all and no need to be declared. You can then break the job down into 3 smaller projects.

It really depends on what the repairs are. What repairs does your property need that justify £15,000 to be spent? It's quite a lot of money. I could strip a small 3 bedroom terrace house right down and replace everything for that amount of cash. Replacing windows would be an improvement so may not count.

You might find you pay out £15,000 to the tradesperson and find your benefits are cut. I really wouldn't take risk either.

tomtontom

Podge52 wrote: »

What would happen if you were working and lost your job.

I think the bank would see an ongoing disability benefit as a secure income and I couldn't see the bank offering it they had any doubt about the ability to repay it.

@OP
I think, although others may correct me you are allowed up to 16k in savings so if 15k doesn't take you over this I think you will be ok.

If an employed person lost their job it would be reasonable to expect them to have insurance that would cover their repayments, and the unemployment would (in most cases) be short term. No such cover is available to those on disability benefits.

Banks generally only take a small proportion of benefit income as regular income because they are not guaranteed, especially with all the changes taking place at the moment. I'm struggling to believe a bank would offer a £15,000 loan on this basis.

merlin68

You might be allowed 16 k but any savings over 6 k will reduce benefits by a pound for every £250.
Now could you afford this as well as the loan repayments, then if you dont happen to get pip on transfer from dla.
5 years is a long time to be paying back. i would at least wait to see if you get a pip award before doing anything.

alano1963

No. I told them I was disabled and I listed my income and the guy told me ESA and DLA are considered regular income but jobseekers is not. I am completely honest. Hence worrying about this.

alano1963

Thanks but I don't need help on making the decision. I just want to know the legalities please.

merlin68

What work needs doing?

alano1963

What difference does that make? windows, kitchen, bathroom, wall etc etc. Never been done since house was built 40 years ago.