Centrelink payments guarantee a well-lived life for people who can’t fend for themselves financially. However, when an emergency happens, they might not be enough. That’s where loans become the only option. But are you eligible for a loan if you depend on Centrelink payments? And what are the terms and conditions of a Centrelink loan payment?
We’ll answer your questions and more in this article, so read on!
What this article covers:
- What Is a Centrelink Loan?
- How Can I Apply for a Centrelink Loan?
- How Long Do You Have Before a Centrelink Loan Payment?
- Will You Need to Secure Your Loan With an Asset?
- Frequently Asked Questions
What Is a Centrelink Loan?
To request a loan, you should have a reliable money source, be it a monthly salary or a full bank account. However, Centrelink loans are mainly intended for people who depend on governmental payments for a living.
Depending on Centrelink can significantly affect your eligibility for loans from banks. However, you have a high chance of getting one from online lending services. Many lenders offer instant Centrelink loans after making sure that the borrowers will be able to pay back in a timely fashion. Some also offer debt consolidation loans, but they’re less common.
On the other hand, Centrelink itself only allows advance loans/payments. While advance payments are one of the best Centrelink benefits, they aren’t practical for people who want the loan as an extra amount of money besides their monthly allowances.
You can request early payment from their website or mobile app, and they’ll cut the amount off from your upcoming payment.
What Is a Centrelink Loan Payment?
A Centrelink loan payment is the money you should give back to the person who lent you cash while you’re on Centrelink payments. While the terms and conditions can vary from one lender to another, the time frame within which you’ll have to repay the loan typically ranges from 16 days to a year.
The amount of money you can borrow while on Centrelink ranges from $300 to $10,000, which falls within the range of most microloans. However, it still depends on the lender, so you can find someone who’s willing to lend you more than these numbers.
How Can I Apply for a Centrelink Loan?
Applying for a Centrelink loan when in financial hardship is relatively easy. Here are the steps you’ll need to follow.
1. Check Your Eligibility
Before applying for loans while on Centrelink, you should make sure you’re eligible for them. The eligibility criteria for loans in Australia are the following:
- Being 18 or older
- Receiving regular income from Centrelink for at least 90 days
- Being an Australian citizen or resident
- Having a working form of contact (email or phone)
It’s worth mentioning that even if you have these criteria, your loan might not be approved. Also, guaranteed approval loans (including guaranteed debt consolidation loans) aren’t common in Australia.
2. Fill Out the Online Application
Online applications for loans are easy to fill. First, you’ll need to write the amount of money you want to borrow, and then you’ll have to fill out some personal info. Here’s a quick list of the information you should write:
- Full legal name
- Contact details
- Date of birth
- Relationship status
- Whether you’re an Australian citizen or a permanent resident
3. Find a Lender
If you choose an online lending service, like Orange Loans, they’ll find you a lender after verifying the data on your application. But first, the lender has to approve your financial condition and assess your ability to pay back the money.
4. Receive the Funds
After the lender approves your eligibility for the loan, they’ll send you a contract and agree with you on a payment method.
How Long Do You Have Before a Centrelink Loan Payment?
The time frame you have to pay the loan depends on the amount of money you borrowed. If you borrowed a small amount of emergency cash, a $500 Centrelink loan, for instance, you should expect to pay in 16 days up to a few months.
But if you request a larger loan to buy white goods, repair your car, or for a student start-up, you can pay for up to a year or more. It’s worth mentioning that getting a large loan while on Centrelink is much more challenging than getting a small one. Most lenders won’t approve unless you have an extra income source besides Centrelink allowances.
Will You Need to Secure Your Loan With an Asset?
Whether you’ll need to secure your loan depends on your bank credit and the money you borrow. Small loans aren’t secured loans, so if you borrow $300, for instance, you won’t need to provide collateral.
That said, if you request a large amount of money, like $10,000, you’ll need to secure the loan with an asset. So if you fail to pay the money back to the lender, they can seize your asset as payment.
Frequently Asked Questions
Are There Responsible Lending Regulations in Australia?
To lessen the risk of scammers, the Australian Securities and Investments Commission obligates lenders to ask about and verify the borrower’s financial situation and assess the contract’s suitability for the consumer. Some institutes also put some regulations to ensure lenders give out fair loans.
Am I Eligible for a Bond Loan If I’m on Centrelink?
Although it’s more challenging to find a lender willing to provide a bond loan for a Centrelink customer, it isn’t impossible. So you can try and see what you get.
Can I Get a Loan Even If I Have Bad Credit?
Yes, you can, but not through banks. Instead, you’ll need to resort to online lending services, and they’ll connect you to a lender within their networks who doesn’t mind giving you money despite your bad credit. You can also apply for a no-credit-check loan if you have a thin credit file.
To Wrap Up
Getting a loan while on Centrelink can be challenging because lenders are less likely to agree; however, it isn’t impossible. Most online lending services allow such loans with flexible criteria. For instance, some lenders won’t mind you having Centrelink as your only income source, but some will obligate that you have an additional source.
So if you’re in dire need of some emergency cash or have doctor bills to pay, don’t worry. There’s always a solution nearby!
Was the guide helpful? Check out these extra resources to delve deeper
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- Bad Credit Debt Consolidation Australia