Single Parent Loans
Every bank is going to look at your repayment capacity when you apply for a loan, even if it’s secure loan (home, car, boat, etc.) where collateral is provided. But if you are a single parent, it might be even more difficult for you to get assistance when you are spending most of your money trying to raise your children.
If you are a single parent and want to apply for a loan, be warned that there are some pre-conditions that should be met. Most banks and other lending institutions will consider your loan application for a personal loan, only if you have been permanently employed for a minimum of 12 months prior to the application date. This rule might be relaxed if you receive a substantial private income or child support or alimony.
Compare Single Parent Loan Options
When considering any type of loan it is important to review all options thoroughly. Engaging with the wrong lender can worsen your financial situation. Below are some tips on how to avoid bad lenders.
• Search for company reviews online
• Search for online complaints
• Review comparison sites but be cautious, most of these sites only provide businesses that advertise with them. To find the best single parent loans available, combine your search efforts with multiple sources.
• Makes sure the businesses you review are licenced, this can be done on the ASIC website
These tips will greatly reduce the chances of you taking on a bad loan.
Quick view – See loan and benefit options for specific circumstances here.
Below are multiple loan and money assistance programs for Single Parents
Specialist Lenders: If government advances and non-profit loans won’t work for you, a specialist lender may be a good option. They provide loans from $1000 to $5000 and generally have flexible approval criteria, even helping those with bad credit – Learn more and apply here.
Keystart: The Australian government has set up a number of welfare schemes to take care of its citizens, and one such initiative is the Keystart Home loan, provided by the Western Australian government. What it essentially means is that the Department of Housing also signs on when the low income earner signs on for a home loan. The Department of Housing might buy 20% or 30% of the property which is decided based on different criteria and the buyer has to pay only the rest of the home loan. This specific loan is available for single parents too, apart from people with disabilities, Aboriginals and public housing tenants, for moving on in life. Other States and Territories have similar programs.
Government Benefits: There are multiple types of benefits and loans provided to single parents and qualification depends on situation. Different schemes include help with education, general living, business and housing loans or rental assistance. In addition to benefits there are multiple grants available. Below are a few examples.
– A basic rate of up to $625.90 per fortnight.
– Telephone Allowance & Utilities assistance
– Child Care Benefit
– Health Care Card
– Rent Assistance, which is normally paid with Family Tax Benefit Part A
– Medicare Safety Net
– Schoolkids Bonus
– Newborn supplement
For a full list and details on how to apply, visit the Parenting Payment section of the Human Services site.
A quick way to see what type of benefits or loans that you may qualify for is to utilise the Centrelink calculator or estimator. This will give you a good idea of what you may be entitled to.
For information on financial assistance for household goods and vehicle maintenance or car purchase, visit our Centrelink loans section which outlines multiple non-profit loans and government Advanced Payments.
Peer-to-Peer Lending: This is a newer type of lending which is created for those in circumstances which may prevent them from getting approved by the banks. P2P lending typically has a lower cost associated to it compared to the banks and allows borrowers to obtain a higher loan amount than other low income loan options. Learn more about these funding option here.
Centrelink Loan Options: If you are a single parent collecting Centrelink benefits, there are a few no interest or low interest loan options available. These are for loan amounts up to $3000 and are ideal for household living needs and unexpected expenses. Review the different borrowing option here.
Shop around: Shop around before you decide on which bank, credit union or building society you want to borrow from. Personal loans will generally have lower interest rates than credit cards, so by doing comparison shopping; you will get the best rates. Check for all necessary documents, and your eligibility. Wait until you are sure to fill out the application forms; if you fill out multiple loan application forms and each one is processed; your credit rating will get adversely affected, and this is something that you can easily avoid. Get a clear idea of the qualification criteria and be truthful when comparing your situation with the acceptance criteria.
Before you decide to approach any institution for a loan as a single parent, do your homework. Find out all the necessary requirements before applying. This will improve the chances of you walking out with a successfully loan.
Whilst getting a loan can be difficult, there are options available. Depending on your situation, grants and benefits may be a alternative solution to cash flow as they can greatly reduce your monthly outgoings by subsidizing many of your expenses.
For more information on benefits for families visit payments for families.