Hardship Loans for Single Mothers Australia

Children have several needs, from school fees to food, clothing, and extracurricular activities. Having to handle all of these expenses as a lone parent can strain you financially, especially because you can’t anticipate and plan for all your kids’ needs. 

Hardship loans for single mothers Australia are a great way to help sort out unexpected bills. Read on to learn more!

What this article covers:

What Are Single Parent Loans?

These loans are intended for single mums or dads going through financial hardships. Single parent loans can fall under different categories, including:

Housing Loans

These loans help people acquire homes. An example is Family Home Guarantee, a loan by the Australian government that helps eligible single parents to have homes. The government has committed to providing 5,000 guarantees yearly between 1st July 2022 and 30th June 2025. 

The government approves several lenders to provide this service. Your loan amount will depend on your eligibility and the location of your property of interest. You’ll also need to give a small deposit and have enough money to cover purchasing fees to access this loan. 

hardship loans for single mothers australia

A mortgage loan is quite beneficial to single mothers because it stands as its collateral, giving you lower rates while allowing you to pay for a more extended period. The Keystart Home Loan is also a housing loan option by Western Australia. 

This hardship loan caters to single parents, people with disabilities, public housing tenants, and Aboriginals. With this loan, the government, through the Department of Housing, cosigns 20% to 30% of your home loan, and then you can pay the rest.

Personal Loans for Single Mothers With Bad Credit

Most lenders rely on credit to determine whether or not to give you a loan. Borrowers with a low credit score usually find it easier to access loans if they provide collateral or a cosigner. 

Financial hardship loans for bad credit help borrowers with poor or even negative credit scores to access emergency funding with reasonable repayment terms.

Loans for Single Mothers on Centrelink 

Centrelink is an initiative by the Australian government that aims to support Australians facing financial hardship. 

To access this government service, one has to call Centrelink and set up an online account to start the application process. 

Centrelink payments are divided into several categories, including:

  • Youth Allowance – This caters to young people between 16-21.
  • Newstart – Applies to the unemployed.
  • Rent Assistance – For those unable to pay rent.
  • Disability Support Pension – Given to people living with a disability.
  • ABSTUDY – Provided to Aboriginal and Torres Strait Islander students.
  • Age Pension – This is intended for retirees.

emergency cash for single mothers australia

A Centrelink loan allows you to borrow money from Centrelink or borrow from a lender and pay with your Centrelink disbursement. 

Since Centrelink payments are predictable, most lenders can give loans between 5 months and five years at an APR of 12% to 48% depending on your credit score.

Hardship Loans for Unemployed Single Mothers

Being unemployed doesn’t deter you from getting financial hardship loans for unemployed as long as you can prove that you can repay it. 

Australia also offers a jobseeker’s payment under Centrelink, which aims to support you as you seek alternative employment. 

Payday Loans for Single Mothers Australia

These are financial hardship loans that single mothers can access in an emergency. The good thing about payday loans is that they can be approved on the same day, provided you meet the eligibility requirements.

Peer to Peer Lending

Peer-to-peer lenders are private investors that provide loans and take regular payments with interest. This form of lending is helpful to single mothers who can’t borrow from mainstream lenders such as banks and credit unions. 

To access a peer-to-peer loan, one needs to be over 21 years old, have a regular income, and have a good credit history.

How Can You Access a Hardship Loan for Single Mothers?

Since this is a single-parent loan, the first hurdle is to prove that you are the sole caretaker of your children. Accessing these loans also requires you to fulfill the eligibility requirements. 

loans for single mothers on centrelinkSome of these include:

  • Be over 18 years and an ID holder.
  • Fill out an application form with your personal information.
  • Proof of income (some lenders will take proof of government assistance like Centrelink).
  • Bank statement (the duration depends on the lender).
  • Provide a cosigner (optional).

Accessing a loan can be difficult, especially because most major lenders, such as banks, lend based on income. A stable income means that you can repay your loan. 

Borrowers with unstable incomes have to go to other lenders, risking high-interest charges and hidden fees. 

Since there are a lot of lending intermediaries, the best way to know who the best loan provider is is to compare different ones and pick the one with the best rates. 

Another way is to check out previous borrower reviews to ensure you will have no hidden fees. 

Before Taking a Loan…

Taking a loan can look like a suitable short-term option, but if not appropriately managed, a loan can lead to a financial crisis. 

Here are some things to consider before taking a hardship loan:

Maintain a Good Credit Score

A good credit score will get you more affordable loan options and higher loan limits. If you have a low credit score, look into ways of improving it. 

You can still access loans with a bad credit score, but you must be careful with the repayment terms.

centrelink loans for single parents

Don’t Borrow More than You Can Afford

Taking a larger loan than your needs may look like a way to anticipate unforeseen needs, but this may only lead you to misuse funds you will have to repay. 

Only take the amount you need and an amount you can comfortably repay over time. 

Watch Out for Hidden Fees

Most hidden fees are written in fine print, so be sure to read the terms and conditions of your loan carefully before accepting it. 

Hidden costs can end up doubling your repayment installments. Look into late fee terms and other penalties.

Look at Your Options

You may be tempted to apply to multiple lenders to increase your approval chances; this is a bad idea. Having all your applications processed will significantly affect your credit score. 

To prevent this, compare all your options and apply to the best lender for you.

Consider Other Options

The National Debt Helpline offers access to financial counselors that provide free, independent, and confidential financial advice. Counseling is beneficial if you’re looking for ways to raise your credit score. 

You can also check the government assistance options available in your state or territory. Your local government website is the best place to find out which assistance you’re eligible for. 

loans for single mothers on centrelink with bad creditSome of these subsidies include:

  • Single-income family supplement
  • Child care subsidy
  • Newborn supplement
  • Parenting payment
  • Rent assistance
  • Family home guarantee

Charities and community organizations also provide relief services that can help tide you over as you wait for your next paycheck. Look into whether your local community center, Salvation Army, or community organization can help care for some of your children’s needs. 

Final Thoughts

Being a single mum should not deter you from getting fast, affordable loans. Single parents are some of the most supported groups in Australia; from welfare programs to grants, the right help is just at your fingertips.

Applying for a hardship loan should be your last resort because loans can damage your credit score even though they’re helpful during financial crises. 

Before resorting to loans, check whether your state or local government is offering assistance for your problem and apply for help. 

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