Life happens, and you might find yourself stuck with unexpectedly high power bills, medical bills, repair fees, or else. So, what can you do if your Centrelink payments don’t cut it? You may turn to fast funding.
However, many banks and financial institutions might disregard applicants who receive Centrelink benefits. At Orange Loans, we don’t, and we’ll show you how loans on Centrelink can help.
What this article covers:
- What Is a Centrelink Loan?
- Do You Qualify for a Loan on Centrelink?
- How Do I Apply for a Centrelink Loan?
- How Much Can I Borrow With 100% Centrelink Benefits Income?
- How Much Do Centrelink Loans Cost?
- How to Use Personal Loans for Centrelink Customers
- Tips for Easy Loans on Centrelink
- Can You Get a Loan on Centrelink With Bad Credit?
What Is a Centrelink Loan?
It’s a personal loan dedicated to applicants who receive Centrelink benefits. Generally, many banks, financial institutions, and lenders may disregard Centrelink customers or dismiss Centrelink payments as a form of income.
However, some banks and loan providers and Centrelink itself are willing to look past that. They may look at the value of your regular government benefits, expenses, and more to determine if you can repay the loan comfortably. Some even consider your benefits a valid main source of income! So, let’s dissect loans on Centrelink.
What Is a Centrelink Loan?
As a Centrelink customer, you should know which financing options are accessible to you. Here are the main ones:
Bank Loans
To get a loan on Centrelink, you’ll need a solid relationship with the bank. That means excellent credit scores, huge cash flows, long savings history, and healthy credit files. You’ll also need a minimum regular income other than your Centrelink payments.
Your eligibility for a bank loan depends on the type of benefit you’re receiving. Youth Allowance isn’t accepted, but Age Pension is. As you can expect, it isn’t very common for Centrelink customers to receive bank loans. What you can apply for is:
Temporary Overdraft
A temporary overdraft is a line of credit that covers your expenditures after your account balance hits zero. By applying for one, you won’t get charged overdraft fees while getting access to extra funds (ranging from some hundred to thousands of dollars).
Also, you can repay these funds without worrying about a strict repayment schedule. And you’ll only pay interest on the money you overdraw.
Business/Personal Loans
If you fit the eligibility criteria, you can apply for a business loan to finance your business or a loan to pay off your personal expenses. Unfortunately, it isn’t likely for Centrelink customers to be eligible for them.
Centrelink Advances
Centrelink can give you a cash advance on your regular payment for emergencies. If you meet the eligibility criteria, you can get an early partial transfer of your support payment or Family Tax Benefit (Partial A).
Centrelink considers how long you’ve received benefits and your benefit type. It requires that you have no existing debts to the Australian Government, live in Australia during the time of application, have repaid previous cash advances, and can repay the advance in six months. The main downside to these Centrelink advance loans is their relatively small amounts.
To exemplify, you can request up to $1,131 with Family Tax Benefit Part A, $446 to $1,339 with Age Pension, Carer Payment, and Disability Support Pension, $250 to $500 with Austudy, JobSeeker, Widow, and Youth Allowance payments, and six months’ worth of payments with Mobility Allowance.
Loans From Lenders
A private lender may offer cash loans to applicants who receive Centrelink benefits, which is the most accessible choice. They may accept Centrelink customers if their benefits don’t make up a certain percentage of their regular income. Even better, some loan providers accept Centrelink as the main income source.
Still, they abide by responsible lending obligations. So, they check your expenses and compare them to your income to deduce if you can repay the loan comfortably. They do that at their own discretion. Loan types you can apply for include:
- Personal Loans: With a minimum income, you can get approved for a loan to pay off any personal expense.
- Payday Loans: Since payday loans are small and short-term cash loans, Centrelink recipients stand a chance of getting up to $2,000 with them.
- Car Loans: You can apply for a car loan with your payment as security, which typically has a low interest rate.
Do You Qualify for a Loan on Centrelink?
Although each lender has their own eligibility criteria, you can expect your lenders to require you to:
- Be an Australian citizen or permanent resident
- Be 18 years old or over
- Have a Centrelink income suitable for the loan amount
- Have a checking account
- Have an eligible Centrelink benefit type
About the benefit type, you might wonder which ones make you eligible. Typically, Centrelink lenders may grant you a loan if the reason for your Centrelink payment is static. However, they’ll hesitate to lend you money if it’s conditional on a form of employment or learning position. To exemplify, lenders tend to accept the following:
- Carer’s Allowance
- Age Pension
- Single Parent Payment
- Mobility Allowance
- Centrelink Pensions
- Child Care Benefit
- Disability Support Pension
- Veterans Affairs Pension
- Jobseeker Payment
- Partnered Parent Payment
- Totally & Permanently Incapacitated Pension (T&PI)
As for Youth Allowance, Newstart Allowance, Abstudy, and Austudy, they’re less accepted benefit forms. However, some lenders will consider your ability to repay the loan and decide accordingly.
How Do I Apply for a Centrelink Loan?
As fast cash loans for Centrelink, they have a speedy and straightforward application process. It’s 100% online and composed of three steps:
1. Submit an Online Application
Add the loan amount and loan term you want, and select the purpose for your loan (paying bills, making purchases, or else). Also, you’ll need to enter your personal information, including your:
- Full name
- Date of birth
- Relationship status
- Mobile phone
- Email address
- Internet banking credentials
Otherwise, you’ll need to have certain documents. We’ll list the main ones below, but note that we might request additional documentation on a case-by-case basis.
- Proof of ID, such as a passport or driver’s licence
- Centrelink documents
- Bank statements for the 90 days before your application
- Tax returns for the past two years
- 100-points of identification
- Employment details (if you’re employed)
2. Find Your Match
We’ll match you with a reputable lender who can approve your loan application, which can take a few moments. They’ll check your credit score, spending, savings, overall income, outstanding debts, and other financial indicators. By considering your application’s suitability and loan’s affordability, they’ll make their decision.
3. Get Your Loan
If the loan provider approves your application, we’ll let you know immediately and connect you with them. They’ll send you a loan agreement so that you can decide if the loan amount, repayments, repayment dates, and applicable fees and charges work for you. If they do, you should sign it.
Finally, your lender will ask you how you’d like to receive the loan. You may get them the same day, the following one, or else (depending on the lender).
How Much Can I Borrow With 100% Centrelink Benefits Income?
There’s no one-size-fits-all loan amount; it depends on the lender, benefit type, overall income, and loan type (secured vs. unsecured). At Orange Loans, we offer loans up to $10,000, but can you access them with your Centrelink benefits?
Applicants may get $300 to $5,000 with a Youth Allowance. More stable benefit types mean bigger loans.
How Much Do Centrelink Loans Cost?
Loans on Centrelink benefits can be categorised into two types, which impact their costs.
SACCs
Short for Small Amount Amount Credit Contracts, these loans are under $2,001, and their terms range from 16 days to 12 months. The Australian Securities and Investments Commission (ASIC) has restrictions over their fees. Accordingly, lenders can only charge the following fees:
- 20% establishment fee
- 4% flare rate
- Government charges (if they apply)
- Default fees and enforcement costs (including the solicitor’s costs and court fees)
Finally, lenders can only charge up to 200% of the loan amount (even if they’re charging default fees). However, this percentage doesn’t apply to enforcement costs.
MACCs
MACC stands for Medium Amount Credit Contract. Its amount ranges between $2,001 and $5,000, and its loan term is anything from 15 days to 24 months. Lenders can demand security for these loans, such as mortgages over goods, cars, and real estate. As for the loan cost, you may pay a maximum of:
- 20% establishment fee
- 48% interest rate
How to Use Personal Loans for Centrelink Customers
Personal loans are flexible, so you can use them for any personal expense. Here are some reasons for getting cash loans on Centrelink:
Utility Bills
You may get an unusually high electricity, phone, or water bill, which you can’t afford on a Centrelink income. So, apply for a small cash loan (Centrelink) to keep the household running.
Maintenance Fees
Maintenance and repairs are critical and difficult to anticipate, which is why small loans for Centrelink customers go a long way. Use them to get the hot water tap running, the car repaired, or else.
Travel Expenses
You’re going to need considerable funds if you’re travelling (especially internationally). This way, you can afford plane tickets, tours, accommodation, travel insurance, car rentals, and more.
Vehicle Expenses
Upgrade your car or motorcycle, and buy a new or used one. While it can be difficult to do that with your Centrelink payments, online loans for Centrelink can help. And if you don’t need an upgrade but just need to fix your car, this loan can help you afford repair or registration fees, pay off fines, or buy a replacement tyre or part.
Medical Bills
Hefty hospital bills can throw you for a loop without emergency cash loans for Centrelink customers. Get the proper medical care for your illness or injury, whether that means optical bills, dental bills, specialist bills, emergency medical bills, or medication accommodation.
Event Expenses
Do you have a wedding, baby shower, or event celebration coming up? You can make your dream event come true with enough funds. Also, a funeral can hit you with considerable expenses, so apply for a loan on Centrelink to have a moving service.
Planned Purchases
Are you planning to buy white goods, equipment, furniture, or even groceries for an upcoming feast? If your Centrelink payments fall short of that, consider taking out small loans for Centrelink customers.
Holiday Expenses
The holiday season comes with its fair share of expenses. You might want to dine at a fancy restaurant, host a party, or buy gifts for your loved ones, so consider getting loans for Centrelink recipients.
Veterinary Expenses
Being a pet owner is no easy job. They may need regular check-ups and injections, have accidents, or get diagnosed with conditions that require medication. Also, they constantly need to be watched, so you may need medical accommodation if you have to leave them.
Family Assistance Loans
If your family is facing financial hardships, living on Centrelink payments shouldn’t mean you can’t help. Easy loans for Centrelink can cover emergency expenses, your Children’s education fees, rent or mortgage payments, and so on.
Tips for Easy Loans on Centrelink
Some considerations to make when you’re applying for a loan with Centrelink payments are:
Reading the Fine Print
Read a loan agreement carefully before signing it, and get a financial consultant’s opinion if you can. Understand all the fees and interest rates, and calculate the total loan cost. If you don’t, you might struggle with loan repayments later.
Budgeting
If you take out a loan, you have to include its payments in your budget. Also, if you opt for a Centrelink advance, budgeting is even more tricky because your benefit payments can stop until the advanced amount has been repaid. So, you’ll have to make do without your Centrelink income.
Can You Get a Loan on Centrelink With Bad Credit?
Yes, you can. As a lender providing service, we don’t conduct credit checks, but lenders might. So, you should ask for bad credit loans or no credit check loans.
Lenders who offer them will use different financial indicators to make their decision, such as your income and recent financial history. They’ll evaluate your application according to suitability and affordability. And if they confirm you’ll be able to pay back the loan without incurring Centrelink financial hardships, they’ll accept your application.
Can You Get a Guaranteed Approval for Centrelink Loans?
No, you shouldn’t expect guaranteed approval loans even from a lender that accepts Centrelink as an income source. Automatic approval is against responsible lending obligations set by the ASIC.
These regulations include “making reasonable inquiries about a consumer’s financial situation, and their requirements and objectives” and “taking reasonable steps to verify a consumer’s financial situation.”
Another crucial step is “making a preliminary assessment (if you are providing credit assistance) or final assessment (if you are the credit provider) about whether the credit contract is ‘not unsuitable’ for the consumer.”
Final Thoughts
As a Centrelink recipient, you have more options than you might think. You can choose bank loans, Centrelink advances, or loans from private lenders, the final option being the most accessible and inclusive. After all, loans for Centrelink income help you through your financial hardships if you aren’t eligible for regular loans.
Their eligibility may depend on the lender and your credit portfolio, benefit type, and overall income. So, you’ll find loan providers who accept bad credit applicants, Centrelink as the main income source, and more. But if you can’t find them, we can match you with the perfect lender!
Was the guide helpful? Check out these extra resources to delve deeper
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