Can I get a personal loan if I receive Centrelink payments?

Patricia Babalis

Patricia Babalis

Being able to access money fast in an emergency by taking out a personal loan can be tricky if you receive Centrelink payments as part of your income.

Although still possible there are some important things to know before signing up for a loan and some other options that may be more appropriate for your situation.

What do I need to know?

A big factor in whether or not you will be able to be approved for a loan is what percentage of your income is from Centrelink payments. If less than 50% of your income is from payments it may be easier to secure a loan than you think. Online lenders such as Good to Go Loans and Ferratum will lend to Centrelink customers and can be approved online, sometimes without a credit check, depending on the amount.

Of course these sorts of loans come with major interest rates and you could end up paying more than double what you borrowed depending on how long you take to pay back the loan. Good to Go Loans estimates that if you take out a $2000 loan online and pay it back within six months you will pay an extra $960 in interest with weekly repayments of $113.85.

Also keep in mind that applying and being knocked back from too many loans will affect your credit rating negatively. To avoid this, make sure you enquire about whether they accept people who receive Centrelink payments and if your credit history will be checked before applying if you are concerned about a bad credit history.  

What are some alternatives?

There are some alternatives to taking out a personal loan if you are in need of some cash that could be more appropriate for your situation.

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Centrelink advance

If you have been receiving your Centrelink payment for 3 months you may be eligible to apply for an advance on your payments if you do not have an outstanding debt to the Australian government. The number of advance payments will vary depending on the type that you receive and your personal circumstances. Speak to a representative from Centrelink for more information on this option.


If you have an existing good relationship with your bank and an overdraft option available on your bank account you may be able to use this as a way of accessing credit in an emergency. You will have to talk to your bank about how much money you can be approved to borrow and note that you will be charged interest on that amount, possibly at a high rate.


NILS (no interest loan scheme) are available to help low income earners with access to small amounts of credit ($300-$1200) in emergencies. The benefits of accessing credit through the scheme are that you will not be charged interest and your repayments will be planned out in a way that is affordable to you. You will only be approved for a loan under the scheme if the item falls into the essentials category such as medical procedures, broken down appliances or school supplies.

If this sounds like it best suits your needs then it is well worth pursuing this option. The only criteria to qualify are that you hold a pension/ health care card, have been residing in your current premises for 3 months or longer and you show a willingness and the ability to repay the loan over time.

Other options

If a NILS loan doesn’t suit your needs and you are hesitant to take out a personal loan there are other options available to you in the form of programs for low income earners. These programs will assess your application against a range of criteria to see if you’re eligible but your status as a Centrelink customer will not be a barrier to receiving a loan.

Some options include StepUP and AddsUP loans that are available through lenders such as Good Shepherd Microfinance.    

What if the loan is for a utility bill?

If the reason you need to take out a loan is to pay a utility bill then stop what you’re doing, there’s a better way. By law, utility providers need to have someone on hand to consult with you if you’re facing hardship and come up with an alternative payment plan. Contact your utility provider as soon as possible if you think you will be having trouble paying your bill for the month, sort out a plan and avoid a costly high interest rate loan. 

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