- Find and compare multiple Centrelink finance options including; loans, subsidies, benefits & more.
- Understand the qualification process see what lenders look for.
- Get genuine money assistance options if qualifying for a loan is not a possibility.
Are you in need of a loan, but have no idea where you can get one because of your income or credit history. Given the current economic climate, it can be very difficult to get a loan. When you are receiving benefits like Centrelink, there are not many loan options open to you. Most money lenders, banks and other financial institutions have very strict criteria when it comes to lending to low income earners or people without jobs, regular income or other means of repayment.
Be Careful of High Interest Short-term Loans
High risk loans like payday or short-term loans are the only options some people believe are available if they are struggling. These type of loans are typically high interest loans, as the risks are perceived to be higher. While they may not always be the best option, they do serve a purpose and can be beneficial in certain circumstances. Some better choices for loans might be Micro Loans through non-profits, Centrelink itself, and Community Initiatives.
Quick view – See loan and benefit options for specific circumstances here.
Below are multiple loan and money assistance programs for those on Centrelink
Micro Loans through Specialist Lenders: As the name suggests, these loans are for small amounts, and to meet any sudden emergencies or urgent needs. With a range of $100 to $5000, these loans are usually processed fast and can be a great option in case of emergencies. Learn more on applying criteria here.
Speckle Loans: This is a small short term loan with lending amounts from $200 – $2000 with a pay back period between 3 and 12 months. Those collecting Centrelink benefits can qualify however no more than 50% of your total income can be made up of benefits.
Good Money: For those living in Victoria on a low income or collecting Centrelink and need a loan, this is a great community finance company with multiple locations. They provide low and no interest loans to cover; vehicle repairs, educational and medical expenses, bills, debt and more.
No Interest Loans Scheme (NILS): This is a small loan amount up to $3,00 and has no interest attached to it. This loan can not be used for general purchases, trips, shopping or debt consolidation, it is specific to the purchase of essential household goods.
Service’s Relief Trust Fund: If you are a Australian Defence Force member you can get access to loans and grants from the Service’s Relief Trust Fund. This fund was established to help members with financial difficulties. Loans come with a very low or no interest rate and can be repaid through a members salary. The 3 fund are the Royal Australian Navy Relief Trust Fund, the Australian Military Forces Relief Trust Fund and the Royal Australian Air Force Welfare Trust Fund.
Fairloans: This is a non-profit partnership with the Nab that provides low interest loans for people who are having troubles qualifying with a bank. They provide loans between $1000 – $4000 over a 12 month period and approval can be done in as little at 48 hours.
Concession Cards: There are concession cards available from Centrelink, which many people are unaware of. These concession amounts are usually lesser than the above sums. If you are an existing user of Centrelink, you might be able to get an advance payment on your regular monthly payments. This is paid out as a lump sum and is adjusted against the regular monthly payments, so that you don’t end up in further debt, as you will when you borrow from a conventional source like a bank or lender.
If you are dealing with financial hardship and are not collecting Centrelink benefits, find out how much financial assistance you or your family may qualify for through the Centrelink benefits calculators. If you are already collecting Centrelink, you may be able to qualify for additional benefits by reviewing the compare calculator/estimator.
Community Initiatives: In many states and even some cities of Australia, government initiatives have inspired or assisted with many non-profit community initiatives and cooperative societies that help low income group members with micro loans and even financial counseling to get out of the debt cycle. Check with your local community centre to find help.
Peer-to-Peer Lending: Is another possible option for those in need of larger sums of money. To qualify you generally need to be over 21, have good credit and people to prove income, among a few other terms depending on the provider platform. Learn more about peer-to-peer lending here.
Are you in need of a Centrelink loan to pay for bills?
There are better options available, which will not put you into further debt. If you are behind on your water, phone, gas or electric bill, you can contact your provider to negotiate new repayment terms – simply ask to speak to a hardship officer. Some charities will also provide vouchers to help with utility debt, especially to keep the power running.
In addition, you can qualify for other financial benefits that include low income concession cards or an Advanced payment. – these payments range between $250 and $500.
Things to consider before applying for a loan – Understanding Approval Criteria
General eligibility for main stream lenders may include the following:
– Must be 18 years or older (proof with ID)
– Be an Australian resident (proof with ID)
– Earn a minimum net income of around $25k a year (this may slightly vary based on lender). You will also need to be able to prove your income with 2-3 months of payslips or provide 2 years of financial statements if self employed.
– Be able to make repayments after accessing incoming cash versus general out goings. Each bank will have its own ratios that it works from.
– Credit history; If you have any blemishes on your credit history it may be difficult to get approval from the big banks.
– Length of employment
– Length of residency in your home
– Amount of credit you already have
– Purpose of the loan may also have a bearing on if you qualify.
– If you have an established savings of more than 3 to 6 months.
The above is a starting point in understanding what mainstream lenders like the banks look at when considering loan applications. This information helps provide them with a risk profile on the borrower. Other specialty lenders will use different aspects of the above but with a bit more flexibility. They also charge a premium for their funds as they are taking a bigger risk of default by reducing their approval criteria.
If you are not confident in your ability to fulfil all of the above, talk to your potential lender first about your situation before applying. Being better prepared will reduce obstacles and help get you in the right loan.
* Centrelink Qualification Criteria
If 50% or more of your income is from Centrelink, the repayments for the loan you apply for must not go over 20% of your income – if they do, you will not qualify for the loan.
General borrowing tips – Important financial considerations
– Before taking out a loan make sure you completely understand the full costs associated with borrowing. Are the benefits of the loan worth the costs?
As an example; Is it worth paying a lender an establishment fee, a loan service fee, payment handling fee (bpay or similar), interest and a possible termination or late fees – that is a long list of potential costs.
– If you have questionable credit, applying for a loan may negatively impact your credit further.
– A good question to ask yourself. How important is the purpose of the loan, is it worth getting in debt for?
Note – Any time you are looking for financial services help, always read the terms and conditions carefully. Try not to make emotional decisions or enter into an agreement out of sheer desperation, you may be putting yourself in a worst off position. If applying for a Centrelink loan or some form of credit, make sure you are fully informed and across all terms and fees, you can comfortably make the repayments and that their is a real benefit for obtaining the loan.
Commonly Asked Questions About Applying For a Centrelink Loan
What are Centrelink loan rates? Depending on who you are borrowing from, the rate can differ immensely. Non-profits and/or government backed loans may have no to very low rates. Examples of these financial assistance products include NILS and Advanced Payments.
For unsecure cash loans, there are numerous short term lenders that provide mini or small loans generally up to $5,000. Most have different types of fees attached to them (establishment fees, monthly account keeping fees, etc) and when calculated out generally equate to a interest rate(APR) up to 48%, depending on loan terms and amount. Don’t forget to look at the comparison rate, which is reflective of all costs associated with borrowing, this can reach as high as 66% in some cases.
What’s the most you can borrow when on Centrelink? There are many factors which determine the amount a person can borrow when Centrelink is the main source of income. Lenders for unsecure cash will generally have a cap of $5,000 or less. Those looking to buy a secure item like a car may be able to receive approval upwards of $30,000. Borrowing capacity is always dependant upon a persons specific financial situation.
What loans can you get from Centrelink? Centrelink does not provide unsecure loans as a traditional lender or specialist lender would. Benefits assistance is however provided; Advanced Payment, NILS, etc.
Those who are collecting Centrelink may however qualify for small unsecure loans from specialist lenders.
How are people getting $5,000 or $10,000 payments from Centrelink? These are not unsecure cash loans for borrowers to access as needed. These are typically forms of benefit payments for specific situations such as The Carer Adjustment Payment (CAP) or Tertiary Access Payment.