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

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

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 personal loan while on Centrelink, and there may be some other options more appropriate for your situation.

What do I need to know?

A big factor in whether you will be approved for a personal loan or not is what percentage of your income comes from Centrelink payments. Some lenders may be less inclined to approve your personal loan application if Centrelink accounts for half or more of your income, but if less than 50% of your income is from Centrelink payments, it may be easier to secure a personal loan than you think.

Keep in mind that applying for and being knocked back from too many personal loans may negatively affect your credit rating, further reducing your likelihood of having loan applications approved in the future. If you are concerned about bad credit, before you apply for a personal loan, check whether the lender accepts people who receive Centrelink payments and if they will check your credit history.  

Selected online payday lenders such as Good to Go Loans or Ferratum will lend to Centrelink customers and can be approved online, sometimes without a credit check, depending on the amount.

Of course, small short-term loans like these come with major interest rates and/or fees, and you could end up paying more than double what you borrowed, depending on your lender and how long you take to pay back the loan.


According to Good to Go Loans, if you take out a $2000 loan online and pay it back within six months (26 weeks) you will pay an extra $960 in interest with weekly repayments of $113.85.

Paying back the same loan over one year (52 weeks) would mean weekly payments of just $66.15, but you’d pay an extra $1440 on top of your original $2000 loan.

What if the loan is for a utility bill?

If you need to take out a loan to pay a utility bill, then stop what you’re doing – there may be 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. 

What are some alternatives?

If you need some cash, there are some alternatives to taking out a personal loan that may be more appropriate for your situation:

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 benefits 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 to access credit in an emergency. You will have to talk to your bank about how much money you can be approved to borrow, remembering that you will be charged interest on this amount, possibly at a high rate.


The No Interest Loan Scheme (NILS) is an initiative from Good Shepherd Microfinance intended to help low income earners access to small amounts of credit ($300-$1200) in emergencies. The benefits of NILS include not being charged interest on your loan, and having your repayments planned out in a way that is affordable to you. You will only be approved for a loan under the scheme if it is to pay for essentials, such as medical procedures, replacing broken-down appliances or school supplies.

To qualify for a loan under NILS, you will need to

  • hold a pension/health care card
  • have been residing in your current premises for 3 months or longer
  • show a willingness and ability to repay the loan over time

Other options

If a NILS no-interest 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 recipient should not be a barrier to receiving a loan.

Some options include:

For more help and support managing your personal finances, visit MoneySmart, or contact the National Debt Helpline on 1800 007 007.

Low interest personal loan options:

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.



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