There are essentially two types of Centrelink loans available and multiple options within these two…
Debt is scary, and owing is the worst feeling. Whether you have a looming expense coming up or you’ve simply overspent, you know money’s going to be tight. When it’s time to face the music, you’ll need to figure out whether you should borrow money to pay for whatever it is you need.
Here are eight questions to help you figure out whether you really need a loan.
Will Lenders Work With You?
If you’re going to miss a car payment, for example, you might be surprised at your lenders’ willingness to work with you. If it’s just one or two payments, you may be able to defer them for a small fee, paid out over time. Communicate and see if they can help.
Additionally, you can speak with your utility providers to juggle things around. Cell phone providers and even energy providers are usually willing to work something out, especially if your problem is temporary.
Is Your Need Short or Long Term?
Are you chronically struggling when it comes to finances, or did you just have a bump in the road? If it’s the former, you should immediately consider financial counselling to take a deeper look at your options. Otherwise, a loan might be the right option for you.
Can You Pay It Back Over Time?
Whether you can realistically repay a loan over time is important. Just because someone will lend you money doesn’t mean you should borrow it, so make sure to assess your problem by the numbers. If you can pay it back over time, go for it.
Can a Loan Repayment Help Your Credit?
In some instances, a loan repayment will actually boost your credit score. Even if your need isn’t great (but you feel kind of stretched thin), a loan repayment might be a good option to help your credit score. That said, you’ll pay for it – with a high interest rate, especially if you go through a private lender.
Can Credit Cards Help You?
Credit cards, in many ways, aren’t different than loans. You’re borrowing what you’ll pay back later. If you’re just a few hundred dollars short for something, it may be worth simply putting the amount on your credit card.
Better Rate: Loan or Credit Card?
Depending on your credit and financial situation, your credit card interest rate for a small loan may be better than what you get from a bank – and you won’t require extra approval in most cases. Make sure you do the research and compare bank loan vs. credit card.
How Much Do You Need to Borrow?
What’s the full amount you need to borrow? If it’s not much, maybe a pay advance or shuffling around other obligations can help. If you need a significant amount, it’s probably time to consider the process.
Should I consider government help?
Especially if your struggle is temporary, you may be better off with non-profit or government based help like Centrelink money options. These generally come with low or no interest, which can be a sizable benefit when money is tight.