Centrelink loans are a special type of loan that’s designed specifically for customers who receive Centrelink benefits. These loans can be a great help when you need extra cash quickly for urgent expenses.
These types of loans are usually small, short-term loans that can be repaid interest-free from your benefit payments. However, they can be a costly option for many borrowers.
Secured Car Loans
If you’re receiving regular Centrelink payments, you may be able to qualify for a secured car loan. This type of financing uses your car as collateral to secure the loan.
In most cases, the lender will run a credit check to see whether you’re qualified for the loan. This credit check will consider your debt-to-income ratio, and whether you can afford to pay back the loan.
However, some lenders won’t count Centrelink payments as income, so you’ll need to find one that is willing to do so. This could make a big difference to your chances of getting approved for a loan.
It’s also a good idea to have another stable source of income that you can use to cover your repayments. If you have other assets, such as social security, alimony, investment dividends, pension, or rental properties, it might be worth mentioning that when submitting your application. This will increase your chance of getting approved and could even lower your interest rate.
Secured Home Loans
Secured loans are backed by collateral, such as your home. This type of loan is a great option for people who may be struggling to make payments or are looking to protect themselves from being hit with high interest rates or fees.
A mortgage is one example of a secured loan, while home equity lines of credit, home equity loans and auto loans are also examples. If you are unable to pay back your loan, the lender can repossess your property and sell it to recover the money they have lost.
If you are receiving Centrelink loans benefits, you may find it difficult to get approved for a standard loan. However, you can still qualify for a mortgage if you can show that your income is stable and that you have other sources of income.
For example, some lenders accept Family Tax Benefit (FTB) Part A and B as income, so long as you can provide proof that you have a full-time job. It’s important to note, though, that this policy differs from lender to lender and is not guaranteed.
Secured Personal Loans
If you’re looking to borrow a larger amount, but your credit rating is holding you back from getting an unsecured loan, a secured personal loan may be an option. These loans are secured by an asset of value – such as your car or home – that your lender will repossess if you can’t repay the loan.
Secured loans are cheaper than unsecured loans and tend to have better approval odds, but they still need to be approved by your lender. The lender will also look at your other debts and credit score before approving you for the loan.
Depending on your situation, some lenders may offer you a secured personal loan even if you only receive Centrelink payments as regular income. But it’s worth asking your lender directly whether this is an option before you apply, as their eligibility criteria and terms and conditions will vary. Having a guarantor can also increase your chances of securing the loan.
There are numerous loans available to Centrelink beneficiaries, but none that stand out from the crowd. We do offer one of the aforementioned and an award-winning loan product to boot, but we aren’t the only ones in this business. The best part is that if you have a credit union or bank where you can deposit your centerlink checks, you’ll be eligible to apply for these nifty little loans. We even have a few to choose from if you’re not lucky enough to be a centrelink beneficiary or one of our other banking partners. Our loans are a great way to pay off your bills while saving for that new TV or holiday home. Our slick customer service teams will guide you through the loan application process.