Couple on centrelink applying for loan

Don’t let the pension get in the way of getting a loan

Rates and Fees verified correct on May 27th, 2016

Receiving Centrelink payments doesn’t cut off your access to credit. Discover what loan options are available to you.

When you receive Centrelink payments, whether it's a carer's allowance, the disability pension or another type, you might find it difficult to access credit. However, there are options available to you when you need finance. These include banks and credit unions as well as short-term lenders. Government and community financial assistance schemes are also available.

Read the guide below to find out if you're eligible for a loan while receiving Centrelink. You can take a look at our guide here if you are unemployed and seeking a loan,  and if you're looking for a home it might be helpful to speak to a mortgage broker or a financial advisor.

Jump ahead to find out where you might be able to apply

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A way to borrow if you’re receiving Centrelink benefits

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    Personal Loans people on Centrelink could apply for

    Rates last updated May 27th, 2016
    Term of Loan Turnaround Time Requirements Max. Loan Amount Available to Centrelink borrowers
    Ferratum Cash Loans
    Ferratum Cash Loans
    16, 22 or 32 days Same Day if approved You must be over 18 and have your own email address, mobile phone number and a bank account. $1,000 Yes Go to site More

    What personal loans am I eligible for if I receive Centrelink?

    You have a few options if you're receiving Centrelink payments and are in need of a loan. Generally, you'll find lenders who can offer you:

    • Personal loans. You're able to apply for personal loans from banks, credit unions and other lenders even when you receive Centrelink. You will have to meet a minimum income requirement and not all types of Centrelink income are accepted. To see what banks will consider you, take a look at the table below.
    • Payday loans. These are small, short-term loans that are available to Centrelink applicants as well as those with bad credit. You're normally able to apply for up to $2,000 although sometimes up to $5,000 or more is available.
    • Car loans. If you're looking to purchase a car, you can consider a secured car loan from a lender that accepted Centrelink applicants. You can purchase a new or used car and use it as security for the loan to get a lower rate.
    • Overdrafts. Do you want credit you can use in an emergency? An overdraft is linked to your account and lets you draw up to and including a certain limit. If you have a good history with your bank you can be approved, even if you receive Centrelink.
    • Alternative financing. There are also various community financing programs and alternative sources of financing you can consider as well as an advance from Centrelink. These are outlined on the page below.

    Tips on making your application count

    • Know if you are eligible. Check the minimum eligibility criteria listed on finder.com.au review pages before you apply for a product. If you meet the minimum eligibility you will be able to apply, although keep in mind that you may not be approved as applications are handled on a case-by-case basis.
    • "Centrelink accepted". You may not see this on bank or lender's sites, but that doesn't mean they will not accept your Government benefits as income. You can often check whether the lender requires you to be employed or if they explicitly state that those on Centrelink are unable to apply.
    • Give yourself the best chance of being approved. You may want to get in touch with a lender to discuss your eligibility, or you may even want to call your current bank who you may have a better chance of being approved with.

    Calculate your borrowing ability

    If you think you’re eligible, look at your most recent Centrelink statement to determine your annual income (this may involve you multiplying your statement by 26 as payments are received every fortnight). Remember to include your supplementary income, or income from your co-borrower.

    Your other options: Government and community financial assistance

    When you receive Centrelink payments or earn a lower income, traditional financial institutions or even payday lenders are not your only options. There is a range of schemes and programs that give you access to credit, often for no or low interest. Here are some of the options that are available:

    • Pension loans scheme. If you're of age pension age, you have equity in Australian real estate and you or your partner receives a reduced age pension rate, you could be eligible for a Pension Loan. These can be short term loans or a loan over a longer period, and how much you're eligible for depends on the equity you have and your age when the loan is granted. Currently, the rate for this scheme is 5.25% and compound interest is charged on how much you owe.
    • NAB StepUP. Developed by NAB and Good Shepherd Microfinance, these are unsecured personal loans of between $800 and $3,000 for individuals and families on low incomes. They are offered at a rate of 5.99% p.a. and are designed for the purchase of essential goods and services.
    • No interest loans scheme (NILS). This is a loan offered by Good Shepherd Microfinance that's designed to be repaid over a 12- to 18-month period. You can apply for between $300 and $1,200 for essential goods and services and you'll be charged no fees and no interest. Eligibility criteria include that you have a Health Care Card/Pension Card or that you are on a low income, that you've been in your current residence for three months or more and you show a willingness and capacity to repay.
    • Centrelink cash advance. Depending on what payment you receive, you could be eligible for an advance on your Centrelink payments. Your eligibility also depends how long you have been receiving payments and how much you receive. Keep in mind you can usually only receive an advance once a year.
    • Concession cards. As a current Centrelink recipient you may be eligible for a concession card, which you may be unaware of. Check on the Centrelink website to see what's available.
    • Good Money. If you reside in Victoria and receive Centrelink payments, you may be eligible for a low or no interest loan from Good Money. Eligibility includes that you're looking for a loan top cover vehicle repairs, educational and medical expenses, bills or even debts. Visit its website to find out more.
    • Service's Relief Trust Fund. Australian Defence Force Members can access no and low interest loans as well as grants through this fund. These are then repaid through your salary.
    • Fairloans. This non-profit has also partnered with NAB to offer loans to people for up to $3,000. The loans are repaid over a period of 12 months.

    Loan options you have if you receive Centrelink

    Now that you know how much you can borrow, let's take a look at the lenders who may accept Centrelink benefits as genuine income. Click on the links to see their range of products and to see their eligibility requirements.

    BrandGenerally accepted?Conditions
    Cash Converterstransparent--green-tickYour loan repayments cannot exceed 25% of your gross income.
    Cash Firsttransparent--green-tickMust also be employed and not be receiving Newstart or DSP.
    Cash Stoptransparent--green-tickYou're able to apply, even if you receive Newstart or Youth Allowance.
    Cash TrainNo-
    ClearCashtransparent--green-tickYou're able to apply, applications are handled on a case-by-case basis.
    Credit24transparent--green-tickYou can apply as long as Centrelink payments are not more than 50% of your income.
    Dollars Directtransparent--green-tickYou need to have been employed for at least one month.
    Ferratum Loanstransparent--green-tickMore than 50% of your total income or 20% of your repayments can't come from Centrelink.
    Good to Go Loanstransparent--green-tickYou're able to apply, applications are handled on a case-by-case basis.
    Loan RangerNo-
    Max Financetransparent--green-tickSole income from Newstart, Youth Allowance or Austudy is not accepted.
    MoneyMeNo-
    MoneyPlusNo-
    Money Starttransparent--green-tickYou need to be employed and earn more than 50% of your income through employment.
    Nimble Short Term LoansNo-
    Rapid Financetransparent--green-tickYou're able to apply, applications are handled on a case-by-case basis.
    Sunshine LoansNo-
    BrandGenerally accepted?Conditions
    American Expresstransparent--green-tickHandled on a case-by-case basis
    ANZtransparent--green-tickMinimum income $15,000 p.a.Austudy or Youth Allowance is not eligible
    AussieNo-
    Bank of Melbournetransparent--green-tickMost Centrelink payments are acceptedProvide a letter from Centrelink (or Department of Social Security, or equivalent) detailing your current entitlements
    BankSAtransparent--green-tickAccept all Centrelink payments except Newstart
    bankmecutransparent--green-tickAccept Centrelink benefits as income
    Bankwesttransparent--green-tickAccept parenting payments and DSP as forms of income
    Bendigo Banktransparent--green-tickAccept Centrelink benefits as income
    Citibanktransparent--green-tickMinimum income $35,000 p.a.If the type of Centrelink income is taxable
    Commonwealth Banktransparent--green-tickMinimum income $14,004 p.a.Accepts parenting payments, DSP and carer's pension as income
    HSBCtransparent--green-tickMinimum income $30,000 p.a.Will consider the payments if type of Centrelink income is taxable
    IMBtransparent--green-tickIt may be considered if you are also earning a wage. Cannot be your sole source of income.
    NABtransparent--green-tickHandled on a case-by-case basis and strict criteria applies
    St.Georgetransparent--green-tickAccept parenting payments and DSP
    Suncorptransparent--green-tickMinimum income $25,000 p.a.Will consider some Centrelink payments
    Westpactransparent--green-tickHandled on a case-by-case basis and depends on the type of income you receiveParenting payments are not considered a type of incomeDSP is accepted

    Understanding your Centrelink payments

    It can be easier to be approved for a loan when receiving certain types of Centrelink payments over others. For instance, youth allowance is a common payment that is not accepted by lenders as a form of income. The first step to applying for a loan is to identify what type of Centrelink benefit you are currently receiving. This can be done by looking at your Centrelink documents. Here is a breakdown of the Centrelink payments that are available and whether they are generally accepted by lenders:

    • Age Pension. This provides you with monetary support when you're retired. Many payday lenders accept this as a form of income while banks may require supplementary income.
    • Carer's Allowance. If you're caring for a dependant person, this provides you with monetary support. This is generally accepted as a form of income by lenders.
    • Youth Allowance. Young people aged 16 to 24 who are studying, undertaking an apprenticeship, training, looking for work or sick can be eligible for youth allowance. Many lenders do not accept this as a form of income although you may find some payday lenders will.
    • Austudy. This is for full-time students and Australian apprentices 25 years or older. You may find it difficult to get a loan with this as your income.
    • Foster Care Allowances. This is a fortnightly payment intended to help you support and pay for a foster child in your car. You may be able to include this as part of your income but you will need to earn supplementary income.
    • Disability Pension. People who have a physical, intellectual or psychiatric condition that stops them from working can be eligible for the Disability Support Pension. While this is generally accepted, you may find some lenders will not accept this as a form of income.
    • Child Support Payments. This is income received to help cover the cost of raising your child or children. You may be able to have it included as part of your income if you can provide a copy of the Family Law Court Order, bank statements proving you receive this income, a letter from your solicitor and a letter from the Child Support Agency (CSA).
    • Family Tax Benefits and Parenting Payments. This is financial support to help cover the costs of raising children. Family Tax Benefits Part A and B is generally accepted by lenders but having supplementary income will help. The age of your children will also be taken into consideration.
    • Overseas Pension. If you receive the pension from overseas some lenders may recognise it as income. This is generally if your pension is coming from: Austria, Belgium, Canada, Chile, Croatia, Cyprus, Denmark, Finland, Germany, Greece, Ireland, Italy, Japan, Korea Republic, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Slovenia, Spain, Switzerland and the USA. You might be required to show that pension is ongoing for a period of time.

    When you're looking for a loan, considering all the options available to you can better place you to find the one that best suits your needs. Hopefully this guide had made this process much easier to understand, and has provided a background about how lenders make their decisions.

    Jargon Buster

    Supplementary income - Income that you may have from a full time or part time job. This also includes income that may be earned by your partner or joint applicant.

    Taxable income - Income that you will need to pay tax on, after you have deducted all expenses you are allowed to claim.

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    172 Responses to Don’t let the pension get in the way of getting a loan

    1. Default Gravatar
      kirstie | May 25, 2016

      We are looking at starting a small business, and at present are both receiving a Centrelink Newstart payment. Is there any lenders that finance small business start up loans, that will over look any defaults that may be on credit file. Needing approx 5000.

      • Staff
        Elizabeth | May 26, 2016

        Hi Kirstie,

        The only lender we currently have available for comparison on finder.com.au that considers bad credit applicants for new business ventures is Max Finance – you can read more about its loan and apply for pre-approval here.

        Hope this helps,

        Elizabeth

    2. Default Gravatar
      Betty | May 24, 2016

      I’m on centre link payment how much can I borrow I get 645 a fortnight an also get cares allowance an that is 121 a fortnight

      • Staff
        Elizabeth | May 25, 2016

        Hi Betty,

        The amount you can borrow depends on your entire financial situation, including your income, debts and assets. If you are only receiving Centrelink payments you can find out some of your options on this page.

        Hope this helps,

        Elizabeth

    3. Default Gravatar
      Suzana | May 23, 2016

      Can I have lone for start small busines if I sam ON Carea pension and have bas rekords?

      • Staff
        Elizabeth | May 24, 2016

        Hi Suzana,

        The only loan we have available for comparison that allows borrowers start up new businesses is Max Funding. However, I am unsure of your eligibility criteria as it depends on your financial situation, including your income, debts and assets. You can submit an initial assessment to see if you are eligible before you submit a full application. If you have further questions about your eligibility it would be best to contact Max Funding directly.

        Hope this helps,

        Elizabeth

    4. Default Gravatar
      Keri | May 17, 2016

      I’m on Centrelink and just wondering what the repayments would be for a 3 to $4,000 loan my income is around 849 my rent is $170 a week.

      • Staff
        Elizabeth | May 17, 2016

        Hi Keri,

        Your repayments depend on a number of factors, including how long you take out the loan for and which lender you take out the loan with, as they all charge varying fees and rates. For instance if you go with a bank (you can see on the second tab above) your rates will be lower. Some banks do consider Centrelink borrowers provided you earn enough income – some may require you to earn supplementary income. You can find out the requirements above.

        If you opt for a short-term credit lender the fees and rates will be higher. ASIC requires that these lenders do not charge more than 48% p.a. and a $400 establishment fee for loans over $2000. However, it’s best you check fees and rates directly with the lender.

        I hope this information has helped,

        Elizabeth

    5. Default Gravatar
      Belinda | April 23, 2016

      I receive newstart allowance but i hold a pensioners concessions card as this means I’m able to receive the same kind of benefits as a person on a pension is entitled too. So what income do I say when asked newstart or which pension do u I say my pension card is nsw as well

      • Staff
        Elizabeth | April 26, 2016

        Hi Belinda,

        As you receive Newstart as your income that is what you will list on your application.

        Hope this helps,

        Elizabeth

    6. Default Gravatar
      | April 23, 2016

      is it possible for my son who is on Newstart at the moment to get a loan for $100,000 to buy out his brothers shareof a house they own,and do renovations,he will then rent rooms and have income of approx $500 weekly,but he needs the money before he can start renting

      • Staff
        Belinda | April 27, 2016

        Hi Rene,

        Thanks for reaching out.

        finder.com.au is an online comparison service so we are not in a position to comment on whether or not your son will qualify for a loan. However, if your son is looking to fund renovations for the property, then you can compare several line of credit loans here.

        You might be interested to read our article about loans for Centrelink recipients where your son can enquire with a mortgage broker to discuss his borrowing options.

        As you’ll see on the table in the above page, most government benefits are only accepted as a secondary source of income so it’s likely that your son will need to show that he has another income source to repay the loan.

        All the best,
        Belinda

    7. Default Gravatar
      Sally | March 11, 2016

      I’m a single mother and unemployed. Is there any chance I can get a loan for a car?

      • Default Gravatar
        Reza | April 9, 2016

        Hi there , can i get a personal loan around $3000 ,pls thanx

      • Staff
        Elizabeth | April 11, 2016

        Hi Reza,

        As a financial comparison service we don’t actually approve loans or loan money ourselves. You can use the guide above to find a lender that you are eligible for and click through to their review page or website. Once you’ve found a loan that you want to apply for and that you’re eligible for, you can click “Go to Site” to submit your application.

        Hope this helps,

        Elizabeth

      • Staff
        Elizabeth | March 14, 2016

        Hi Sally,

        Some lenders may consider you for a loan while you’re unemployed. To read a guide on borrowing while you’re unemployed, and also find out what options you have in terms of where to apply, you can see this page.

        I hope this has helped.

        Thanks,

        Elizabeth

    8. Default Gravatar
      bernie | February 26, 2016

      Is there any lenders for single parent pensioner on centrelink with bad credit that I can apply for

      • Staff
        Elizabeth | February 26, 2016

        Hi Bernie,

        The lenders on the page above consider applicants who receive Centrelink payments as income. The lenders under the “bank” tab are unlikely to consider you with bad credit, but short-term lenders have more flexible lending criteria and the majority will consider you with bad credit. You can click through to review pages by clicking on the name of the lender and once you’ve found a loan you want to apply for, click “Go to Site”.

        Thanks,

        Elizabeth

    9. Default Gravatar
      | February 23, 2016

      Can any one tell me is there a 24 hour a day loan place for someone on newstart

      • Staff
        Matt | February 24, 2016

        Hi Mick,

        Thanks for getting in touch. To find out a range of loans that may be accessible for Newstart recipients, you can visit our guide here.

        As the majority of lenders are based online, you can apply at any time. Keep in mind that if you are approved the funds will be processed during business hours.

        Cheers
        Matt

    10. Default Gravatar
      Leonie | February 21, 2016

      My husband and I are both on the age pension. We have spent a lot of money on our home, not just with improvements but also with adding several rain water tanks and 5kw solar panels etc.We own our own home and car and have no credit cards etc. We would like to borrow $20000 over a 10 year period to finish our bathroom, spare bedroom and to finance our burials. We can manage repayments of $150 a fortnight on our pension. Should I give up now or try to find someone who can help?

      • Staff
        Elizabeth | February 22, 2016

        Hi Leonie,

        There are still a range of lenders who offer loans to those on the age pension. However, the maximum loan period is usually seven years which will mean your repayments would be higher, but you can use our personal loan calculator on this page to work out your fortnightly repayments. Also, using an asset like your home or car as security for the loan may be able lower your interest rate and increase your chances of getting approved. Have a look at the “banks” tab on the page above to compare lenders for your loan and click through to the review pages to find out the loans on offer.

        I hope this information has helped.

        Elizabeth

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