It is possible to take out a small loan when receiving Centrelink payments. These include loans from short term lenders, banks and credit unions. Government and community financial assistance schemes are also available.
You can find out about Centrelink business loans here and if you're looking for a home loan, read our Centrelink home loans guide.
Are you struggling financially?
If you're struggling financially and would like to speak to someone for free financial advice, information and assistance you can call the Financial Counsellors hotline on 1800 007 007 (open from 9:30am to 4pm, Monday to Friday). If you are suffering financial problems related to the coronavirus pandemic you may be eligible for additional support. Find out more here: https://www.finder.com.au/coronavirus-financial-help
⚠️ Warning about Borrowing
Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
Loan options if you receive Centrelink
- No credit checks
- Borrow up to $1,900
- Bad credit borrowers OK
100% confidential application
Ferratum Cash Loans
Ferratum offers no credit check short term loans with a fast and easy online application. Apply today to get approved.
- Loan amount: $1,900
- Loan term: 3 to 12 months
- Turnaround time: Same day - conditions apply
- Fees: 20% of borrowed amount + 4% of borrowed amount each month
- Must be 18+
- Must not be receiving benefits
- Confidential and secure!
Government and community financial assistance options
When you receive Centrelink payments or earn a lower income, it's important to know that traditional financial institutions or even payday lenders are not the only options available. There are schemes and programs that provide access to credit, often for no or low interest. Here are some of the options that are available:
- Pension loans scheme. Aged pensioners who have equity in Australian real estate and have a partner who receives a reduced age pension rate could be eligible for a pension loan. These can be short term loans or a loan over a longer period. How much they are eligible for depends on the equity applicants have and their age when the loan is granted. Currently, the rate for this scheme is 5.25% and compound interest is charged according to 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. Customers can apply for between $300 and $1,500 for essential goods and services and there are no fees and no interest. Eligibility criteria include a Health Care Card/Pension Card or that the applicant is on a low income, that they've been in their current residence for three months or more and show a willingness and capacity to repay.
- Centrelink cash advance. Depending on what payments are received, some people could be eligible for an advance on their Centrelink payments. Eligibility also depends on how long the applicant has been receiving payments and how much they receive. Keep in mind applicants can usually only receive an advance once a year.
- Concession cards. Current Centrelink recipients may be eligible for a concession card, so check on the Centrelink website to see what's available.
- Good Money. Residents in Victoria receiving Centrelink payments may be eligible for a low or no-interest loan from Good Money. Eligibility includes applicants seeking a loan to cover vehicle repairs, educational and medical expenses, bills or even debts.
- 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 via their 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.
Things to consider about making a Centrelink loan application
- Eligibility. Check the minimum eligibility criteria listed on finder.com.au review pages before you apply for a product. If the minimum eligibility is met applications can be made. However, it's important to highlight that this doesn't guarantee an approval for the loan.
- "Centrelink accepted". If this isn't on a lender's site, this doesn't mean it won't accept government benefits as income. Check directly with the lender to find out if applicants must be employed or if it explicitly states that those on Centrelink are unable to apply.
- Get in contact directly. Get in touch with the potential lender to discuss eligibility. An alternative is to call your current bank to check if that will approve loans for people on Centrelink.
What loan options are there for people on Centrelink?
Click on the links below to see the range of lenders, products and eligibility requirements.
|Cash Converters||Loan repayments cannot exceed 20% of the gross income.|
|Cash Stop||Accepts applications from those on Centrelink payments including Newstart or Youth Allowance.|
|Cash Train||Applicants must work full-time or part-time to qualify.|
|ClearCash||Applications are handled on a case-by-case basis.|
|Credit24||Applications considered as long as Centrelink payments are not more than 50% of income.|
|enably||Applicants must be employed and earn more than $1,500 per month.|
|Ferratum Loans||More than 50% of total income or 20% of repayments can't come from Centrelink.|
|Good to Go Loans||Applications are handled on a case-by-case basis.|
|MoneyMe||Applicants need to be employed.|
|Nimble||No more than 50% of the total income can come from Centrelink.|
|Speckle||Minimum gross income of $30,000 annually not inclusive of government benefits. No more than 50% of the total income can come from Centrelink.|
|Rapid Finance||Applications are handled on a case-by-case basis.|
|Sunshine Loans||Applicant's main source of income cannot be from Centrelink.|
What types of personal loans are eligble for an applicant receiving Centrelink payments?
You have a few options if you're receiving Centrelink payments and are in need of a loan. Generally, you'll find lenders that can offer you:
- Personal loans. It is possible to apply for personal loans from banks, credit unions and other lenders when the applicant is receiving payments from Centrelink. It's important to note that applicants will have to meet a minimum income requirement and not all types of Centrelink income are accepted. To see which banks consider these applications, take a look at the table above.
- Payday loans. These are small, short term loans that are available to Centrelink applicants as well as those with bad credit. Also referred to as cash loans, they are usually for up to $2,000 although sometimes up to $5,000 or more is available.
- Car loans. A secured car loan might be an option from a lender that accepts Centrelink applicants. Applicants can purchase a new or used car and use it as security for the loan to get a lower rate.
- Overdrafts. An overdraft is linked to a bank account and allows users to draw up to and including a certain limit, usually if there's an emergency. Customers who have a good history with their bank may be approved, even if they receive Centrelink payments.
- Alternative financing. There are also many community financing programs and alternative sources of financing that are definitely worth considering, as well as an advance from Centrelink. These are outlined on the page above.
How to calculate borrowing ability
To work out if someone is eligible for a Centrelink loan, look at the most recent Centrelink statement to determine the annual income (this may involve multiplying the statement by 26 as payments are received every fortnight). Remember to include supplementary income or income from any co-borrowers.
Understanding Centrelink payments
It can be easier to be approved for a Centrelink 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 Centrelink loan is to identify what type of Centrelink benefit you receive. This can be done by looking at documents provided by Centrelink. Here is a breakdown of the Centrelink payments that are available and whether they are generally accepted by lenders:
- Age Pension. This provides monetary support for the retired. Many payday lenders accept this as a form of income while banks may require supplementary income.
- Carer's Allowance. For people who are caring for a dependent person, this allowance provides 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 some payday lenders will.
- Austudy. This is for full-time students and Australian apprentices 25 years or older. It can be difficult to get a loan when receiving this payment.
- Foster Care Allowances. This is a fortnightly payment intended to help support and pay for carers with a foster child. This can be considered as part of an income but a supplementary income will be required in addition to this allowance.
- 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, 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 a child or children. It can be assessed income if the applicant can provide a copy of the Family Law Court Order, bank statements proving they receive this income, a letter from a 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 are generally accepted by lenders but having supplementary income will help. The age of the children will also be taken into consideration.
- Overseas Pension. For people who receive a pension payment from overseas some lenders may recognise it as income. This is generally if the 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 or the USA. Applicants might be required to show that pension is ongoing for a period of time.
For those who are receiving Centrelink payments and looking for a loan, it's important to consider all the options available before making a decision.
Supplementary income. Income from a full-time or part-time job. This also includes income that may be earned by a partner or joint applicant.
Taxable income. Income that will need to have tax paid on it, after the recipient has deducted all expenses that can be claimed.