What is a Centrelink Loan and how to apply

There are essentially two types of Centrelink loans available and multiple options within these two types of loans for people collecting benefits. Qualifying for a Centrelink loan will be dependant upon your individual circumstances and how you currently collect Centrelink benefits.

If your sole income is Centrelink payments, then getting approved from a bank or specialist lender will be difficult. However there still are options to access cash for various needs. For those who collect Centrelink payments but also have another form of income, there are more options for getting a loan.

What is a Centrelink loan?

Accessing cash when on a lower income or collecting benefits can be difficult. Because of this a range of organisations have created different lending products for those on Centrelink. This is to help with purchasing essential household needs, bills, emergencies, or other situations that require cash.

Lenders, government, and non-profits have created different types of Centrelink loan or cash options to help those in need of financial assistance. These options can include low or no interest loans to finance with competitive to higher rates based on the borrower’s risk profile.

Essentially these are finance options to cater to those who receive Centrelink as part or all their income.

Loan options for those collecting Centrelink & employed

Those that have an additional income to Centrelink have more options than those that don’t. More income potentially provides a larger buffer for serviceability – the ability to repay the loan. Options can include different finance provided by specialist lenders and non-profits. This can include instant loan options to low or no interest rate or fees finance from non-profits.
Review a list of Centrelink loan options here.

Loan options for those only collecting Centrelink

If Centrelink is your sole income, many lenders will not provide loans. This is because benefits are provided to only cover immediate living needs which does not allow for enough income to repay a loan. However, there are still options to get financial help!

This can include Advanced Payments for your current benefits in addition to other money help services for those on Centrelink.

How to apply for a Centrelink loan

Be sure you qualify before applying. Taking out too many credit enquiries in a short period of time can negatively impact your credit score. Receiving multiple rejections can also have a negative impact to your health, especially if your already in a difficult financial situation.

Read through terms, conditions, disclaimers, and eligibility criteria carefully. If you don’t understand or are unsure you will qualify, a quick phone call to the lender can be advantageous.

Most applications are similar in what information they request. Being able to provide proof of financial circumstances is where many borrowers become unstuck. Having poor credit is another area that influences declines.

Understanding loan amounts and loan types

Different situations require different types of loans. Below are quick points to outline potential loan types for situations and amounts.

Instant or same day Centrelink loans – Typically this type of loan will be the equivalent of a payday loan. Finance approvals are flexible compared to most lenders however interest rates and fees associated with these loans can be very high.

$100 to $1,500 Centrelink loan – These are basically the same as instant or same day loans, they are just advertised by the loan amount versus the ladder. Beware of the high costs of these loans.

Centrelink Advanced Payment – This is a benefit that allows borrowers to access future payments sooner. It isn’t a loan but as the name says, an advance payment from future benefit payments. Taking out this type of advance reduces what you will receive in the future until the amount is caught up. Advance payments can be as low as $50 up to $1,000+.

Non-profit Centrelink loans – These are the loans that provide the lowest cost for borrowing with minimal to no fees or interest! Loan amounts vary between $300 to $4,000+.