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Getting a loan while on Centrelink
If you're on Centrelink and need more money urgently, you have loan options - even if you're unemployed. Check what choices you have, including low and no interest loans.
It can be hard getting loans if you're unemployed on Centrelink. But there are options even if most of your income comes from Centrelink benefits. Be careful though, as these loans could be more expensive than normal. Keep in mind you might also be eligible for Government and community financial assistance schemes that offer loans with no or low interest, which tend to be more favourable.
⚠️ 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.
Things to consider when making a Centrelink loan application
Eligibility. Check the minimum eligibility criteria listed on Finder's review pages before you start filling out application forms. If the minimum eligibility is met, applications can be made. However, it's important to remember that this doesn't guarantee 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.
Work out if you can afford it. Before applying check how much the loan will cost including the comparison rate plus any establishment fees or late payment fees.
What loan options are there for people on Centrelink?
Click on the links below to see the range of lenders, products and eligibility requirements.
Most Centrelink payments are accepted. Provide a letter from Centrelink (or Department of Social Security, or equivalent) detailing your current entitlements.
Handled on a case-by-case basis and depends on the type of income received. Parenting payments are not considered a type of income. DSP is accepted.
What loans can I get on Centrelink?
Personal Loans
Personal loans from banks, credit unions and other lenders when the applicant are an option if you're 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.
Payday loans
Payday loans are loans with low borrowing amounts and short terms, and 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. Since these loans are riskier for lenders they are more likely to charge higher interest rates on these types of loans.
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.
Overdrafts are a type of credit provided by banks, and are linked to your bank account. It allows you to spend more than what is currently in your account, to a certain limit, and Centrelink recipients may be eligible depending on which bank they use. Interest will be charged on the amount drawn.
How to calculate how much you can borrow
To work out if you're eligible for a Centrelink loan, look at your most recent Centrelink statement to determine the annual income (you can work this out by multiplying the payment amount by 26 as payments are received every fortnight). Remember to include any other sources of regular income or income from any co-borrowers.
Which Centrelink benefits make me eligible for a personal loan?
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, which 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:
Factor
Impact
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 the pension is ongoing for a period of time.
JobSeeker Payment
This income is to support people financially while they're looking for work or are unable to work temporarily due to illness or injury. A small number of payday lenders offer loans to borrowers receiving JobSeeker payments.
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.
Remember that applying for multiple loans at once can hurt your credit history making it harder to get approved for loans in the future.
What to weigh up: The pros and cons of a Centrelink loan
Cover your needs more quickly. Rather than painstakingly saving up, you can pay for what you need more quickly with the help of a loan.
Make repayments over time. Getting a loan to cover a cost breaks up the payment for the thing(s) you need over time. Not paying for an expense (particularly a larger one) all at once can be easier on your budget, particularly if you are having to be careful with your money month to month.
More interest-free/low-interest options available to you. Being on a lower income means that you are more likely to qualify for no interest or low-interest loans that are offered by not-for-profits and other organisations.
Difficulty being approved for traditional loans. If you're on Centrelink, you're generally less likely to be approved for most traditional loans than someone on a higher income. This is particularly the case if Centrelink makes up more than 50% of your total income.
Difficulty meeting repayments. It may be difficult to factor loan repayments into an already stretched budget. This is especially true when it comes to personal loans or payday loans, which have higher interest rates and fees than loans offered by not-for-profit institutions.
Getting trapped in a debt cycle. Getting into debt is risky for anyone, as it can lead to further debt if you fail to make payments on time. If you are ever unable to make a loan repayment, it's crucial to contact your lender ahead of time to let them know.
How to apply for a loan while on Centrelink payments
To apply for a loan while on Centrelink payments, it's important that you first check whether or not you are eligible for the loan in question prior to submitting an application, as this will differ from loan product to loan product. The application process will also differ, depending on which type of loan you are opting for. Most applications can be done 100% online.
For non-government and community assistance options, you will need to have the minimum of:
Proof that you are aged 18 or over and an Australian citizen/permanent resident.
A regular income that makes up more than half of your Centrelink income.
Evidence that the loan repayments do not exceed 20% of your gross income.
For the following government and community assisted options, you will need:
Pension Loans Scheme
Steps to apply:
Sign in to myGov and go to Centrelink.
Select Payments and Claims from the menu, then Claims, then Make a claim.
Under Seniors select Get started.
Select Apply for a loan under the Pension Loans Scheme.
Answer all the questions. Each screen has information to help you complete the application. This includes how to submit your supporting documents and any other forms you need to complete.
Submit your application.
Supporting documentation:
Proof of age and identity (and details of your partner's identity, if applicable)
Your bank account details
Your tax file number
Proof of Australian residence, if you've lived outside Australia
Proof of whether you're a member of a couple
StepUP loan
Steps to apply:
Send your enquiry to StepUP.
Complete paperwork sent by your StepUP Microfinance worker.
Bring your paperwork to an interview with your worker.
Your application will be sent to NAB for assessment, which includes a credit check.
If approved, you'll need to visit your local NAB branch to sign your loan contract. You will either receive a cheque made out to the supplier, or the supplier will be paid via EFT. If your application is declined, you will receive a call from your StepUP Microfinance Worker and a letter from NAB.
Eligibility
Have a Health Care Card/Pension Card, or receive Family Tax Benefit A
Reside in your current premises for more than 3 months
(This and other eligibility criteria will be discussed by the Microfinance Worker when you enquire.)
Jargon buster
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.
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:
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 to borrow depends on the equity the applicant has 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 that 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.
For the following government and community assisted options, you will need:
Pension Loans Scheme
Steps to apply:
Sign in to myGov and go to Centrelink.
Select Payments and Claims from the menu, then Claims, then Make a claim.
Under Seniors select Get started.
Select Apply for a loan under the Pension Loans Scheme.
Answer all the questions. Each screen has information to help you complete the application. This includes how to submit your supporting documents and any other forms you need to complete.
Submit your application.
Supporting documentation:
Proof of age and identity (and details of your partner's identity, if applicable)
Your bank account details
Your tax file number
Proof of Australian residence, if you've lived outside Australia
Proof of whether you're a member of a couple
StepUP loan
Steps to apply:
Send your enquiry to StepUP.
Complete paperwork sent by your StepUP Microfinance worker.
Bring your paperwork to an interview with your worker.
Your application will be sent to NAB for assessment, which includes a credit check.
If approved, you'll need to visit your local NAB branch to sign your loan contract. You will either receive a cheque made out to the supplier, or the supplier will be paid via EFT. If your application is declined, you will receive a call from your StepUP Microfinance Worker and a letter from NAB.
Eligibility
Have a Health Care Card/Pension Card, or receive Family Tax Benefit A
Reside in your current premises for more than 3 months
(This and other eligibility criteria will be discussed by the Microfinance Worker when you enquire.)
Elizabeth Barry was the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review. See full bio
Elizabeth's expertise
Elizabeth has written 291 Finder guides across topics including:
Bria Horne is a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication. See full bio
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I’m on Centrelink payments and run a small but very successful ebay business but I want to grow which requires money. I’m a power seller and achieved this after 2 months with 2 products and $300 per week in sales. My credit rating is 0 own a car, board, very little expenses. Now, if I start applying for loans and get knocked back it goes on the credit rating and counts against me. How can I get a loan if I can without the problems of being knocked back?
Your options are more limited if you receive Centrelink benefits, but there are still a couple of business loan options to consider
The New Enterprise Incentive Scheme was specifically designed for Centrelink recipients who want to start and work full time in their own business.
The key to being approved for a business loan is to carefully review the eligibility criteria and provide a clear, detailed explanation of how you meet all the requirements.
From the link above, you will see lenders offering Centrelink business loans. In addition, the New Enterprise Incentive Scheme (NEIS) is another possible option for you since this program is for people on Centrelink who are prepared to start and work full-time in their own new business. NEIS counts as a Centrelink-approved activity for up to 13 weeks from commencement.
I hope this helps.
Please feel free to reach out to us if you have any other inquiries.
You have accessed the right page where you can see your options on lenders who may accept applicants receiving Centrelink payments.
You can click on the name of the lender and you will be directed to our review page where you can learn more information about the loan products they offer; their loan rates and fees and application process. If you also click on the green “Go to site” button, you will be redirected to the lender’s website where you can start your application or speak with them directly.
Before applying, please make sure that you meet the lender’s eligibility criteria and read through the loan terms and conditions to see if it best suits your needs.
Being self-employed, retired, or on a pension does not mean you cannot access credit. You may be required to meet other terms and conditions and provide additional documents, it may be helpful to do your research before applying for a credit card.
We have done some of the hard work for you and made a list of providers that accept retired applicants, as well as the documents you will need to improve your chances of approval. Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.
Which type of loan would I have the best chance of approval? On newstart, FTB, rent assistance, child support, carers allowance and reg casual fortnightly wages of $200. Credit rating default utilities, currently making repayments.
Require minimum $2000, ideally $5000. Had no luck with banks and 1 recent online application not approved. Need finance desperately for current temporary accommodation arrears and removalist costs to relocate. Ta :-)
I can understand how tough it was for you to get a loan.
In relation to your temporary accommodation reason of getting a loan, state and territory governments are available to help you with emergency and temporary housing. You may be able to get temporary accommodation in low-cost motels, hotels or caravan parks if you are experiencing a housing crisis. You might also be able to get help securing a rental bond. Contact the relevant housing department or organisation in your state for help.
Since you’ve been having a hard time getting a loan from banks, you may consider government and community financial assistance schemes. My best recommendation is for you to speak to someone for financial counselling. You can call the Financial Counsellors hotline on 1800 007 007, they open from 9:30 am to 4 pm, Monday to Friday.
I hope this somewhat helps.
Please feel free to reach out to us if you have any other enquiries.
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Do you really need a loan today?*
Hi,
I’m on Centrelink payments and run a small but very successful ebay business but I want to grow which requires money. I’m a power seller and achieved this after 2 months with 2 products and $300 per week in sales. My credit rating is 0 own a car, board, very little expenses. Now, if I start applying for loans and get knocked back it goes on the credit rating and counts against me. How can I get a loan if I can without the problems of being knocked back?
Cheers!
Hi Jason,
Thank you for getting in touch with Finder.
As per the expert overview, the three most important things about getting a business loan on Centrelink:
From the link above, you will see lenders offering Centrelink business loans. In addition, the New Enterprise Incentive Scheme (NEIS) is another possible option for you since this program is for people on Centrelink who are prepared to start and work full-time in their own new business. NEIS counts as a Centrelink-approved activity for up to 13 weeks from commencement.
I hope this helps.
Please feel free to reach out to us if you have any other inquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
I have a advance payment from Disability pension & owing $650. I want to pay off with some of the loan mpney.
Hi Judy,
Thanks for leaving a question on finder.
If you are looking to pay off your loan with your pension, you can instead contact the lender directly to arrange this.
Please send me a message if you need anything else. :)
Cheers,
Joel
I am after a loan I have a part time job as well as being on newstart single Mum. I work over 25 hrs a week.
Hi Me-lissa,
Thanks for reaching out to finder.
You have accessed the right page where you can see your options on lenders who may accept applicants receiving Centrelink payments.
You can click on the name of the lender and you will be directed to our review page where you can learn more information about the loan products they offer; their loan rates and fees and application process. If you also click on the green “Go to site” button, you will be redirected to the lender’s website where you can start your application or speak with them directly.
Before applying, please make sure that you meet the lender’s eligibility criteria and read through the loan terms and conditions to see if it best suits your needs.
I hope this helps.
Cheers,
Charisse
I would like to know if I can get a credit card while on a carers payment and allowance? Is there anything for me?
Hi Meagan,
Thanks for leaving a question on Finder.
Being self-employed, retired, or on a pension does not mean you cannot access credit. You may be required to meet other terms and conditions and provide additional documents, it may be helpful to do your research before applying for a credit card.
We have done some of the hard work for you and made a list of providers that accept retired applicants, as well as the documents you will need to improve your chances of approval. Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.
Cheers,
Joel
Hi,
Which type of loan would I have the best chance of approval? On newstart, FTB, rent assistance, child support, carers allowance and reg casual fortnightly wages of $200. Credit rating default utilities, currently making repayments.
Require minimum $2000, ideally $5000. Had no luck with banks and 1 recent online application not approved. Need finance desperately for current temporary accommodation arrears and removalist costs to relocate. Ta :-)
Hi Tan,
Thank you for getting in touch with Finder.
I can understand how tough it was for you to get a loan.
In relation to your temporary accommodation reason of getting a loan, state and territory governments are available to help you with emergency and temporary housing. You may be able to get temporary accommodation in low-cost motels, hotels or caravan parks if you are experiencing a housing crisis. You might also be able to get help securing a rental bond. Contact the relevant housing department or organisation in your state for help.
Since you’ve been having a hard time getting a loan from banks, you may consider government and community financial assistance schemes. My best recommendation is for you to speak to someone for financial counselling. You can call the Financial Counsellors hotline on 1800 007 007, they open from 9:30 am to 4 pm, Monday to Friday.
I hope this somewhat helps.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni