A £10m fund offering interest-free loans to tenants struggling with rent arrears has opened for applications.

The Scottish Government's tenant hardship loan fund is designed to help people who have had their finances or employment impacted by the coronavirus pandemic and do not have other means of housing support.

Loans will be available for social and private tenants up to a maximum of nine months’ rent costs, covering rent arrears and future rent, where those arrears have arisen since 1 January 2020 (the loan will not be available where a tenant had rent arrears before this date). The loan can include up to a maximum of three months' future rent payments as part of the nine month total.

Loan repayments will be deferred for six months as standard, and loans repaid over a five year period. This recognises the continuing uncertainty around the impacts of the pandemic.

Offers will be subject to an affordability assessment, as part of the Scottish Government’s commitment to responsible lending. This will look at the applicant’s incomings and outgoings to check whether they have enough surplus income, after other costs, to make the loan payments. 

The application process for the loan highlights that there may be other more appropriate financial support options available to them, and will signpost people to sources of further advice and support before they make an application.

Applications for the fund can be completed online

Housing Minister Kevin Stewart commented: "There is no single solution to the difficulties being experienced as a result of the impacts of the pandemic in Scotland, and the tenant hardship loan fund is a part of a broader effort to support those who are affected.

"We want people to access the most appropriate form of financial support. For the majority of tenants facing financial difficulties and arrears the best means of support is regular non-repayable support, for example through universal credit and discretionary housing payments.

"However, for those who may fall through the gap and are unable to claim such support, or who might be thinking of borrowing, this new fund will be a helping hand to manage any rent issues that have arisen in the last few months as a result of the impact of COVID-19."

Last week ministers announced that enforcement of evictions from rented properties will be halted in Scotland for a six week period between 11 December and 22 January.

Regulations will be introduced that will prevent eviction orders being brought, with the exception of cases of serious antisocial behaviour.