If you’re already receiving Centrelink payments, then you understand just how helpful the extra cash can be, no matter your situation. Of course, there are times you may need a little more to tide you over.
Lenders will assess your earnings as a part of the application process. If you are relying on Centrelink payments as your main source of income, it can make it a harder process.
This article discusses how to get a loan on Centrelink, your options, and key do’s and don’ts.
Can You Get A Loan On Centrelink?
Your options can be limited when attempting to get a loan on Centrelink. Lenders are likely to view you as a risky prospect since Centrelink payment amounts can be inconsistent.
It’s important to know that traditional lenders aren’t your only option. If you look beyond the banks, you’ll find there are plenty of Private Lenders, ready to take you on and help out with your financial needs.
Some lenders might offer you fast cash loans, which can be useful for covering car repairs, hospital bills, and other unexpected bills that crop up from time to time. But what if you’re looking for something more?
It’s about shopping around and looking at all the different options on the market. Don’t let your Centrelink payments hold you back.
Get A Loan On Centrelink – Types Of Loans Available
If you’re looking at getting a loan on Centrelink, you first need to consider what type of loan you’re looking for.
Here are some for you to consider and choose from:
- Personal loans: this is one of the most common types of loans people choose to take out. A personal loan can be used for virtually any purpose you need. Unlike credit cards, they generally have lower interest rates and a clear repayment plan.
- Car loans: looking to purchase a new car? You could use your Centrelink payments as security for your loan, which can also help to lower the interest rate.
- Payday loans: sometimes, you need a simple cash injection to tide you over until your next payday. These loans are generally under $2000 with flexible approval, making them useful for the short term. However, they can be incredibly risky if you find yourself unable to make repayments on time. Learn about the risks here.
- Centrelink cash advance: It’s also worth looking into whether you’re eligible for a cash advance on your current Centrelink payments. Generally, you only have the option to do this once a year, but that could be all you need to get back on your feet.
It’s important to look at your circumstances and determine what loan best suits your needs. Once you know what you’re after, you can shop for the right lender who will take you on with your Centrelink payments.
3 Key Considerations Before Taking Out a Loan on Centrelink
Before you get a loan on Centrelink payments, it’s important you’re prepared and know what to expect. You should never take out a loan you can’t pay back. Here’s what you need to consider:
- Don’t miss payments. This will incur extra fees and could impact your credit score. Missing repayments or extending your loan also means you’ll pay more interest over time, so the debt costs more overall.
- Factor it into your budget. Determine how the loan fits into your existing budget. Will you be able to pay it back each week? Do you need to cut down on some other expenses?
- Read the fine print. Make sure you know exactly what you’re signing, and all the fees involved before going ahead. You don’t want any nasty surprises.
Considering these 3 points will put you in the best position possible to pay back your loan and stay out of debt in the long run.
Dos and Don’ts of Getting a Loan on Centrelink
DO – Check Which Benefit You Are On
For some lenders, Centrelink benefits can count as income. This means your chances of taking out a loan can be higher. This typically doesn’t apply to all payment types.
If you rely on Youth Allowance, Jobseeker or Austudy as a major chunk of your income, you will unlikely get a loan on Centrelink. Why? Because they are temporary payments. If your circumstances change, you will no longer be eligible to claim them.
The first step is to determine what benefit you are on. Next, calculate how much this benefit contributes to your income. Providing this information to your lender upfront will make it quick and easy to determine what you are eligible for when it comes to taking out a loan.
DON’T – Focus On One Lender
Just like taking out a regular loan, it is important to shop around. Of course, you want to do this without negatively affecting your credit score. This means not applying for many loans at once or applying for no credit check loans instead.
Look at different interest rates to ensure you get the best deal. You can even shop between traditional (banks) and non-traditional lenders to find what works for you. There is no one-size-fits-all when it comes to taking out a loan. Therefore, it is important to do your research and shop around to get the best deal.
DO – Look For Lenders That Work With Centrelink
Shopping around is important before you rush to get a loan on Centrelink. Some lenders actually state ‘Centrelink Accepted’ on their website. Of course, if you can’t find this straight up, it doesn’t automatically mean they won’t accept Government benefits as a payment.
The next step is to call them up and chat directly to ask them. Many lenders will be upfront about their policies. This means they will communicate whether they accept Centrelink payments as a form of income when taking out a loan.
DON’T – Borrow Above Your Means
Being on Centrelink payments already, you don’t want to borrow above your means, which can result in being unable to pay off the debt.
It can even end up being quite expensive to borrow small amounts of money. All loans come with interest, so if you are unable to pay them back in a timely manner, you will be left with increasing interest over time.
DO – Look At The Types Of Loans Available
Personal loans aren’t the only types of loans available to you while you are on Centrelink.
Depending on what type of benefit you are on, you may qualify for a Centrelink advance payment. Usually, these need to be repaid within six months, or they will be subtracted from the amount Centrelink pays you.
DON’T – Limit Yourself
Just because you are receiving Centrelink doesn’t mean you are limited in your options when it comes to taking out a loan. All it means is that you need to shop around and find the right lender for you and your needs.
Get a Loan on Centrelink with Australian Lending Centre
Are you ready to take out a loan using your Centrelink payments? Australian Lending Centre could help.
Whether you have a bad credit score or are relying on Centrelink as your income, we could have the right financial solution to suit your needs.
