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How To Get A Loan While On Centrelink


The law requires Australian credit providers to lend money responsibly. Lenders must ensure borrowers can afford the repayments, factoring in their income, expenses, credit history and credit score. That said, getting approved for a personal loan while receiving Centrelink payments is generally more challenging.  

However, while qualifying for a Centrelink loan will be more difficult, it’s not entirely impossible. Lenders can still consider your application for a personal loan if you meet their lending criteria and prove that you can make regular payments.  

This article discusses what you need to know if you’re looking for a loan while on Centrelink and your available options.   

Be Wary Of High-Risk Loans 

Dire circumstances and unexpected expenses can make it easy to resort to high-interest short-term loans. Specialist lenders offer loans targeted at people with low credit scores and a tarnished repayment history. However, these loans often come with higher interest rates and fees.  

This case is especially true for personal loans that don’t require credit checks. As such, make sure you go over all the fees involved, which may include the following: 

  • Contract terms 

  • Interest rates 

  • Other fees 

Payday loans can appear to be your only viable option in certain circumstances. Still, you must understand what you’re getting into to avoid putting a band-aid over an expense only to get into deeper financial trouble.

These lenders can charge an establishment fee of 20% of the loan amount on top of a monthly service fee of 4% of the loan amount. You’ll often end up paying more in fees and interest than the loan amount, which is a terrible proposition if you’re trying to keep a business afloat.   

Lending Options For Those On Centrelink 

If you apply for a personal loan with traditional lenders like banks, not getting approved will be a notch against your credit score. As such, consider other lending options and microloans through non-profits, community initiatives and Centrelink before applying for personal bank loans.   

Centrelink Advance Payment 

You can apply for a Centrelink Advance Payment to get part of your income support payment or Family Tax Benefit (Part A) early. If approved, you can get the advance payment at once or in two instalments, with the amount depending on what Centrelink payment you’re receiving.  

For example, those on Austudy, JobSeeker or Youth Allowance may be eligible to advance payments between AUD$250 and UAD$500. Should you be approved, you’ll need to repay the advance every fortnight through deductions from your regular Centrelink payment. Alternatively, you can also choose to repay the advance early.

Concession Cards 

Instead of taking out loans, you can also avail of concession cards from Centrelink. Concession cards aren’t the most viable solution when you need cash. Still, these cards can help spread your monthly budget by giving you access to cheaper health services and medicines. The card you get depends on your situation. These concession or health care cards include the following: 

  • Pensioner cards

  • Low-income cards

  • Standard health care card

  • Health care card for foster children

  • Ex-carer allowance (child) health care card

  • Commonwealth seniors health card

If you’re eligible, you must consider getting a concession card, even if you don’t need a loan. 

No Interest Loan Scheme (NILS) 

A NILS loan is the perfect solution for unexpected expenses regarding essential goods and services. If you have a Health Care Card or Pension Card or earn less than AUD$45,000 a year after tax, you can get up to AUD$2,000 for expenses that include: 

  • household essentials, such as appliances and furniture;

  • car repairs and registration;

  • medical and dental expenses;

  • essential devices, such as a phone or laptop; or

  • education expenses.

These loans come with no fees, interest or extra charges. However, a NILS loan isn’t a cash loan. You can’t use this for other expenses, such as rent, credit card bills or loan payments.  

Community Initiatives 

Non-profits and cooperative societies across Australia, like the Fairloans Foundation and Good Money, offer microloans to low-income groups. In addition, some organizations also provide financial counselling to help individuals and families out of the debt cycle.   

Service Relief Trust Fund