How to get a loan from Centrelink

Unexpected expenses happen to everyone. Whether you receive income from employment or Centrelink – or a combination of the two – it’s vital everyone has access to cash when they need it. Often, spreading the cost of a significant purchase makes sound practical sense. Other times, urgent repairs or necessary medical treatments just can’t wait. Our quick guide to loans for people on Centrelink will help you figure out what help is available.

Who lends to people on Centrelink, and how do I apply?

Banks, other loan providers, and Centrelink itself might be able to consider your situation in some circumstances. What’s important is to choose the right solution for you.

Banks won’t automatically exclude you from eligibility just because you’re receiving benefits. However, you’ll likely need to have a longer-term relationship that’s in good standing. Your bank will consider applications on two fronts. Firstly, you can apply for a temporary overdraft. Secondly, you can ask for a personal loan or a business loan while on Centrelink income. You’ll need to be able to demonstrate a minimum regular income to apply to your bank for any form of credit. Application is via your local branch or online banking account.

Centrelink offers a cash advance in some circumstances. Your eligibility for is based on the type of benefit you receive. How long you’ve been on benefits is also a factor, and the number of advances you can get during set periods is limited. Applications can be made at your local Centrelink office or online if you link your MyGov account. Centrelink won’t consider requests from people who:

• Are outside Australia at the time of application
• Are still repaying an advance, even if it was taken more than a year previously
• Can’t afford to pay back an advance within six months
• Owe any money to any Australian government department

Non-profit organisations also offer low or no-interest loans to people on Centrelink. You’ll need to meet eligibility criteria to apply.

Approved cash loan providers offer loans for many people who are receiving benefits. Responsible lending legislation applies, so you’ll need to demonstrate you have regular income – however, many lenders accept Centrelink payments. Loan providers will want to check you’re able to afford loan repayments without incurring hardship.

Will the type of benefit I receive affect my eligibility?

It’s always worth checking with specialist lenders regarding your eligibility for finance. Often, lenders will consider your application – even if their website doesn’t carry the “Centrelink Accepted” mark. Banks and other lenders have different criteria when it comes to qualifying for a loan.

If you’re on Age Pension, most banks will require you to have a secondary form of regular income before they lend to you. However, many specialist cash loan lenders will consider your application based solely on regular pension payments.

Banks don’t generally accept Youth Allowance as eligible income; however, most specialist lenders will. If you qualify, you’ll be able to apply for a loan between $300 and $5,000 – based on your ability to pay the sum back.

People receiving Carer’s Allowance should have no issues with both banks and specialist lenders.

Banks don’t generally consider Austudy when making decisions on loan applications. Specialist lenders may still offer products based on your ability to repay.

What can I use my loan to pay for?

Smaller, faster loans and cash advances can be used to pay for a wide variety of expenses. When you apply, the lender will want to make sure you’re able to pay the loan back. That means they’ll look to make sure you’re not using the funds to cover ordinary day-to-day expenses. Australians use small cash loans to pay for things like car repairs, medical expenses, veterinary bills – and pretty much any unplanned cost you can think of. Cash loans can be used to spread the cost of planned purchases too – such as rental bonds, holidays, and vehicle upgrades.

It’s a bit of an emergency – how long do different loan types take to arrange?

That depends on your choice of lender and the way you apply. For instance, online applications are faster than attending your local Centrelink or bank branch. Applying for a small loan means there’s no need for paperwork because you’re applying online. lender Different institutions and lenders have differing requirements, so make sure to consider speed of process when you make your choice.

How much can I borrow when I’m receiving Centrelink payments?

Centrelink has different terms and conditions for cash advances, depending on what type of benefit you receive. That will affect the amount you can access, repayment terms, and how many times you can apply.

• If you’re receiving Family Tax Benefit Part A, you can ask for up to $1,131, but you can only access one advance at a time.
• Recipients of Age Pension, Carer Payment, or Disability Support Pension can apply for a cash advance every six months. If you’re single, you can access sums between $446 and $1,339, and if you’re in a couple, those amounts drop to $336 and $1,009.
• Those receiving Austudy, JobSeeker, Widow and Youth Allowance payments can access advances between $250 and $500.
• If you receive Mobility Allowance, you can access one advance every twelve months, and it will be equal to six months worth of your current payments

One thing it’s essential to be aware of is that with Centrelink advances – your benefit payments can stop for the duration of the advanced amount. That means you’ll need to budget carefully for the period you’re without income. You’ll need the advance to cover whatever unexpected expense you’ve incurred – plus your usual cost of living.

Today’s small loan providers work to consumer-friendly guidelines. Your ability to borrow gets judged on your ability to repay. Lenders will look to make sure that you can deal with the loan comfortably. You’ll also be able to choose how long the repayment period runs. There are two types of emergency loans for people on Centrelink:

• Unsecured Small Amount Credit Contracts (SACCs) are used to provide loans between $300 and $2,000. They offer repayment periods between 16 days and one year. Fees are fixed and capped as a percentage of the loan amount.
• Secured or unsecured Medium Amount Credit Contracts (MACCs) are used to offer loans between $2,001 and $5,000. You can choose a repayment period between 16 days and two years. MACC fees are also capped.

Many Australian lenders offer both SACC and MACC loans to borrowers who receive part or all of their income via benefits. Online application is straightforward, and loan providers look to make funds available instantly.

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