Getting a Loan When Receiving Centrelink Benefits

Managing finances while receiving Centrelink benefits can be challenging. Sometimes, you might need additional funds to cover unexpected expenses, such as replacing a broken air conditioner, medical or dental bills or make a significant purchase, such as a new car to keep you mobile. But how do you go about getting a loan when receiving Centrelink benefits? Here’s a comprehensive guide to help you understand your options and the process involved.

^{* Money3 is not affiliated with, or endorsed by, Services Australia, but does provide personal loan and vehicle finance options which are available to recipients of benefit payments}

Do You Really Need a Loan?

Before diving into the loan application process, it’s crucial to evaluate whether you genuinely need a loan. Ask yourself:

Is this expense urgent and unavoidable?
Can I manage without borrowing?
Are there alternative ways to handle this expense, such as borrowing from family, budgeting and saving or cutting back on non-essential spending?

Taking a loan may be a last resort, especially when you’re on a fixed income. Consider the potential impact on your finances and whether you can realistically manage the repayments. Use our personal loan calculator or vehicle finance calculator to get an idea of your possible repayments.

A Range of Loan Types Are Available

If you decide that a loan is necessary, you’ll find that several types of loans are available to Centrelink recipients. Each type serves different purposes and comes with its own set of terms and conditions.

Short Term Loans

Short-term loans, often referred to as payday loans, provide small amounts of money that need to be repaid quickly, typically by your next payday. Loans typically range from $200 to $2,000. which can be helpful for urgent expenses but often come with higher interest rates and fees than other types of loan. They should be used cautiously due to their cost and to avoid repeat borrowing cycles.

Personal Loans

Personal loans, also known as cash loans, offer larger sums of money and longer repayment periods compared to short-term loans. These loans can be used for a variety of purposes, such as covering holiday expenses, rental bonds, medical expenses, or funding home improvements among others. Interest rates and chances of approval when on Centrelink can vary, so it’s important to shop around for a good match. Money3 has a long history of working with customers on Centrelink and will give you a fair go.

Vehicle Finance

If you need a vehicle, specific finance options are available to help you purchase a car. Vehicle finance typically comes as secured loans, where the car serves as collateral or security for the loan. Ensure that you understand the terms and can safely afford the repayments before committing to vehicle finance.

Not All Centrelink Benefits Are Treated as Income

When applying for a loan, it’s essential to know that not all Centrelink benefits are considered income by lenders. Even by lenders who specialise in loans on Centrelink. Some benefits are more likely to be accepted as income, including:

Age Pension
Disability Support Pension
Family Tax Benefit

However, other benefits might not be regarded as sufficient for loan approval, especially if they are your only source of income. These typically include:

Newstart Allowance
Youth Allowance
Abstudy
Austudy

Always check with the lender regarding their criteria to ensure you meet their requirements.

Getting Your Loan Approved

Several factors can influence your loan approval when you’re receiving Centrelink benefits.

Specialist Lenders

Certain lenders specialize in providing loans to Centrelink recipients. Money3 is a lender that understands your financial situation and offers tailored loan products. Money3 will give you a fair go!

Loan Affordability

Lenders will assess your ability to repay the loan. They’ll consider your income, including Centrelink payments, and your existing financial commitments - such as other loans. To improve your chances, ensure that the loan amount you’re applying for is realistic and that you have a budget plan demonstrating your ability to make repayments. See our loan calculators to get started.

Your Credit History

Your credit history plays a significant role in loan approval with many lenders. A positive credit history shows lenders that you have a track record of repaying debts on time. If your credit history is less than perfect, consider steps to improve it, such as paying off small debts and ensuring timely bill payments. Even with a bad credit history in the past, Money3 could still help, if your loan is now affordable to you.

Repaying Your Loan

Once your loan is approved and you’ve received the funds, it’s crucial to manage your repayments responsibly.

Create a Budget: Incorporate your loan repayments into your budget. Make sure you allocate enough funds each month to cover the repayment amount.
Automatic Payments: A loan with Money3 will set up automatic payments, as part of the loan process. This can help you avoid late fees and additional interest charges.
Communicate with Your Lender: If you encounter financial difficulties and struggle to make repayments, contact your lender immediately. Many lenders offer hardship programs that can provide temporary relief when you need it or can adjust your repayment schedule.

Summing Up

Getting a loan while receiving Centrelink benefits is possible, but it requires careful consideration and planning. Evaluate your need for a loan, explore the different types of loans available, and understand the factors that influence loan approval. By managing your loan responsibly, you can navigate this financial challenge and meet your needs without compromising your financial stability. If you need further guidance, consider consulting a financial advisor or reaching out to community organizations that offer support to Centrelink recipients.

Learn More About Your Centrelink Options:

Car loans on Centrelink^*Personal Loans on Centrelink^*

^{* Money3 is not affiliated with, or endorsed by, Services Australia, but does provide personal loan and vehicle finance options which are available to recipients of benefit payments}

Frequently Asked Questions

Money3 Loans Pty Ltd, commonly known as Money3, is an Australian finance company that provides a range of loan products tailored to meet the diverse needs of its customers. With a commitment to offering fair go and excellent customer service, Money3 has been a trusted provider of financial solutions since 2000. The company is known for its friendly and helpful service, with a Melbourne-based team that provides personal assistance in Australia and not outsourced overseas.

ABN: 36 108 979 406
Australian Credit Licence: 389067

Learn more about us.

Money3 offers a variety of loan products to cater to different financial needs:

Personal Loans: These loans can be used for various purposes, including car repairs, medical expenses, holidays, weddings, rental bonds, home improvements, and vet bills. Loan amounts range from $2,000 to $30,000, with terms from 2 to 5 years.
Vehicle Finance: This includes loans for cars, motorbikes, caravans, campervans, RVs, trailers, boats, jetskis, vans, trucks, tractors, and more. Loan amounts can go up to $75,000, with terms from 2 to 7 years.

To qualify for a loan with Money3, you need to meet the following eligibility criteria:

Age: Over 18 years old
Income: Minimum income of $480 a week or $2,080 a month , which can include some types of Centrelink benefits
Residency: Must be an Australian resident (permanent resident or citizen)
Income Payment: Your income must be paid into your account

Money3 considers applications from individuals with bad credit, those receiving Centrelink payments, and self-employed persons. However, most Centrelink benefits are acceptable, except for Newstart Allowance, Youth Allowance, Abstudy, or Austudy as the sole source of income.

With Money3, you can borrow a personal loan amount ranging from $2,000 to $30,000. The loan terms vary from 2 to 5 years, depending on your financial needs and eligibility. Personal loans on Centrelink* can be used for various purposes, including car repairs, medical expenses, holidays, weddings, rental bonds, home improvements, and vet bills.

Money3 offers vehicle finance with loan amounts up to $75,000. The terms for vehicle finance loans range from 2 to 7 years. Eligible vehicles for car loans on Centrelink* include cars, motorbikes, caravans, campervans, RVs, trailers, boats, jetskis, vans, trucks, and tractors. This type of loan can help you purchase a wide range of vehicles, ensuring you have the transportation you need.

* Money3 is not affiliated with, or endorsed by, Services Australia, but does provide personal loan and vehicle finance options which are available to recipients of benefit payments

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