If you are on Centrelink benefits and looking to get a loan, there is actually quite a lot of options available to you. Depending on your circumstances and what you need, from a fast loan to pay bills or a secured loan for a new car, there are lenders who will consider your Centrelink payments as income and lend to you on that basis. There are basically 3 main options which are:
1. Centrelink Loans
Did you know centrelink has a lending service available to you now? Now called Centrelink advanced payments, these small loans allow you to borrow against future payments as long as you meet the requirements set out by Centrelink. These requirements are quite extensive (although most people will pass), but if you want a Centrelink loan you must meet the following criteria:
Have received these payments for at least 3 months before applying:
- Age Pension
- Carer Payment
- Disability Support Pension
- Farm Household Allowance
- Newstart Allowance
- Parenting Payment
- Widow Allowance
- Widow B Pension
- Wife Pension or
- Youth Allowance for job seekers
Or be eligible for these payments (no Minimum time necessary):
- Youth Allowance for students
- Family Tax Benefit Part A or
- Mobility Allowance
Also to be eligible you must not:
- Be repaying an advance payment you received more than 12 months ago
- owe a debt to the Australian Government
- be unable to afford to repay the advance payment out of your payment within 6 months without suffering financial hardship
- be overseas when you apply for the advance payment of your income support entitlement
- Nearly all payment types are eligible
- Can only have one at a time
- Need to prove that you are able to make the repayments
- Maximum 6 months to repay
- Have to be in Australia when you apply
If you meet the criteria the amount of the advanced payment depends on the centrelink benefits you receive. Speak with centrelink to get the exact amounts eligible to you but the eligble amounts are:
Maximum amount is $1,110.69 and you can get regular lump sum advances or one-off advances.
- Age Pension, Disability Support Pension, Carer Payment, Widow B Pension or Wife Pension
The number of advance payments available over any given 13 fortnight or 6 month period are:
- 1 advance payment at the maximum amount
- 1 or 2 advance payments greater than the minimum amount, or
- 3 advance payments each at the minimum amount
The amount available to you is limited by a minimum and maximum amount.
|Advance amount||If you are single||If you are partnered|
- ABSTUDY, Austudy, Newstart Allowance, Parenting Payment, Widow Allowance or Youth Allowance
You can only get one advance payment in a 12 month period. The maximum amount is $500. The minimum amount is $250. The amount can be taken as one lump sum or in 2 instalments.
- Payment details for Farm Household Allowance
You can only get one advance payment in a 12 month period. The maximum amount is $500. The minimum amount is $250. Advance payments of Farm Household Allowance can only be taken as one lump sum payment.
Its best to speak to centrelink directly (if you can get through to them on the phone) to see if you are eligible and under what terms but these small interest free loans are an excellent option for those one-off purchases or unsuspected needs. It also budgets repayments for you in the future as well as taking repayments before you recieve your benefit so you don’t get caught up with missed payments and the fees and charges that come with it.
2. Cash Loans for Centrelink Customers
The second option is to use a third party to get loans on centrelink. This is beneficial for people looking for smaller amounts who may of already used their centrelink advance or to supplement the advance. These loans are known under many names: cash loans, fast loans, instant loans, small loans, payday loans, online loans and easy loans. You have probably heard of at least one of these and despite all the names they are pretty much the same thing. These loans are defined by a few common traits:
- Easier to get
- Lower amounts to borrow
- Higher interest rates or cost
- Faster repayments
- Some will accept people with bad credit.
Here are a few providers for people in different situations but by no means is this an exhaustive list, feel free to do your own research.
Fast Loans for Centrelink Customers
If you have good credit and regular centrelink payments these companies can help
- Wallet Wizard
Cash Loans for Centrelink Customers with Bad Credit
If you have bad credit be prepared to pay a little more, but there are companies who will help
Centrelink Loans with no Credit Check
If you are not sure about your credit or you just want to be safe when applying for a loan you should consider these companies:
- Sunshine Loans
- Perfect Pay Day
Its important to do your own research no matter who you choose. These loans are not for the unprepared, payments are usually quite quick and the interest or cost can be very high. If you do not make payments the cost can be very difficult to manage. Generally these companies should only be used as a last resort and with a strict budget in pace to ensure you can manage your repayments.
3. Personal loans for people on Centrelink
The last option is to use a conventional lending institution such as a bank or credit union. A lot of people often assume that you cannot get a loan with just centrelink payments but some of the biggest names in the industry now consider these payments as income. Each lender is different, some will only consider some payments, others will require secondary income (part-time job) and some will not consider centrelink beneficiaries at all. In general though secured loans such as those for motor vehicals, have better success rates then personal unsecured loans. Here are 3 lenders to get you started
- Bendigo Bank
However they will look at every application individually and they may have several regulations applicable to the loan, such as what it can be spent on and how much interest is charged for example. It doesn’t hurt to ask though so contact them and see what they can do for you. Alternatively banks have even softer lending criteria for their credit card products. Depending on what you need this may be another option for you although it comes with significant drawbacks. The first is the cost, in particular the higher interest rate and the second is the fact there is no repayment schedule for the debt. Quite easily and quite often this can lead to perpetual interest payments for people with little disposable income to pay off the principle.
Whilst its great to know so many options are available to you, its important to not look at it as free money or an opportunity for frivolous purchases. Whichever option you choose make sure you have a budget in place that can account for your full repayments and ensure you are aware of all the potential cost and interest involved. If you have tried any of the services or if I have left a question unanswered let me know in the comments below.