Disability Pension Loans

In case you’re unaware, Centrelink provides financial help to individuals who suffer from a disability that prevents them from working. The disability can be physical, intellectual, or psychiatric, but ultimately, it has to be debilitating enough to prevent an individual from working. 

So, since these individuals hardly make any income, Centrelink provides them with regular payments known as disability pensions. 

Now, while the disability pension can be enough to make ends meet, it’s not nearly enough to cover an unexpected expense. 

So, when that happens, can you take out loans for people with disabilities, or will lenders turn you away? Keep reading to find out the answer and more. 

What this article covers:

Can You Get a Loan on a Disability Pension?

You absolutely CAN, thanks to disability pension loans.

In a nutshell, disability pension loans fall under the category of pensioner loans. These loans are catered to individuals whose main income comes from pensions, be it a senior loan pension or a Centrelink disability pension, 

disability pension loans

Typically, pensioner loans can be as low as $300 or as high as $5000. As with any loan, they come with fees and/or interest rates, but they’re totally unsecured.

So, you don’t need to own any valuable assets or even bring on a guarantor to get a disability pension loan. You just need to be:

  • Over 18 years old
  • An Australian resident 
  • A recipient of the Centrelink disability pension 

What Can You Do with a Disability Pension Loan?

As previously stated, a disability pension loan is an unsecured personal loan. As such, you can use the loan money however you want. Typically, most borrowers use the money on:

  • Car repairs
  • Medical and dental expenses 
  • Vet bills
  • Travel and holiday expenses
  • Home renovations and furniture
  • Electronics 
  • Rental bonds
  • Unexpected emergencies

Can You Get Disability Pension Loans with Bad Credit?

This will depend on your lender. 

As you know, all lenders tend to run a credit check on their potential clients before approving their loan applications. When your credit history is less than ideal, most lenders will immediately turn you away because you’re now what’s known as a high-risk client. 

loan for disability pensioners

However, some lenders will look past your credit history and instead look at your current financial situation, i.e., your income and expenses. 

If everything checks out, they’ll be happy to give you a loan, albeit with slightly higher fees and interest rates than the average. Still, keep in mind that it’ll probably take you a few tries till you find a lender willing to give you the money. 

How to Apply for a Disability Pension Loan

Thankfully, applying for a disability pension loan is as easy as it gets. 

You simply need to fill out an online application in which you’ll state:

  • Your personal information, such as your email, address, phone number, etc.
  • How much you’d like to borrow
  • Your preferred loan terms 

After that, you’ll attach a few documents to the application, including:

  • A copy of your ID
  • Proof of income (wages or Centrelink payments)
  • 90-day history of your bank transactions 

Once the lender reviews your application and confirms your details, the money should reach your bank account in less than 24 hours. 

loans for disability pensioners

Alternatives to Disability Pension Loans

If you’re having a hard time getting a disability pension loan due to your bad credit, here are a couple of other options you can try. 

No-Interest Loan Scheme (NILS)

With the No-Interest Loan Scheme, low-income individuals can borrow up to $1500, provided the money will be used for essential purchases. This means the money can only be used to pay for things like:

  • Household items
  • Medical and dental services
  • Electrical goods
  • Educational items
  • Car repairs 

Now, the beauty of the NILS is that it doesn’t come with any fees or interest rates. You only pay back what you borrow and nothing more. 

However, not everyone Australian can apply for a NILS loan. To qualify for the loan, you need to make an income below $45,000 per year after tax or, instead, have a Health Care Card or a Pensioner Concession Card.

disability pension loans australia

Centrelink Advance Payment 

The Human Services Department in Australia allows any Centrelink recipient to receive emergency cash loans, known as advance payments. 

Now, again, this type of loan doesn’t come with any fees, interest rates, or credit checks. However, its major flaw is that it cuts your income for the coming weeks/months. This may leave you in a hard spot, not being able to pay for your essentials like groceries, rent, utilities, etc. 

Also, keep in mind that you can’t get a Centrelink advance payment if: 

  • You live outside of Australia 
  • You have a debt to the government 
  • You’re still repaying an advance you got more than one year ago
  • You can’t repay the loan within the next six months

Conclusion 

Disability pension loans are personal unsecured loans that are offered to disabled Centrelink recipients. With such a loan, you can get the extra bit of cash you need and choose the repayment plan that suits you best. 

Unlike the NILS, you don’t have to worry about fulfilling specific terms with a disability pension loan. Moreover, you won’t be strapped for cash as you would with a Centrelink advance payment. 

So, fill in an application, sit back, and wait till that money comes to you!!

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