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:


Did you find this helpful? Why not share this article?



Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.


Learn more about personal loans

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Is a personal loan a variable or fixed-rate loan?

Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.

A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.

With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.

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

It is hard, but not impossible, to qualify for a personal loan if you receive Centrelink payments.

Some lenders won’t lend money to people who are on welfare. However, other lenders will simply consider Centrelink payments as another factor to weigh up when they assess a person’s capacity to repay a loan. You should check with any prospective lender about their criteria before making a personal loan application.

Can I merge my personal loan with my home loan?

Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.

However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

Does refinancing a personal loan hurt your credit score?

Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.

In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.

However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.

Can I get a $4000 personal loan if I’m unemployed or on Centrelink?

Before most providers of personal loans or medium amount loans will approve an application, they’ll want to know you can afford the loan’s repayments on your current income without ending up in financial stress. Several lenders don’t count Centrelink benefits when assessing a borrower’s income for this purpose, so these borrowers may find it more difficult to be approved for a loan.

If you’re unemployed, self-employed, or if more than 50% of your income come from Centrelink, consider contacting a potential lender before applying to find out whether they accept borrowers on Centrelink.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.