Micro Loans for Centrelink Customers
Contrary to popular belief, Centrelink customers can still apply for micro loans while also enjoying the benefits of Centrelink.
In this guide, we’ll dig deeper into the topic of micro loans for Centrelink customers, including the application process, eligibility criteria, and risks; so let’s get started!
What Are Micro Loans for Centrelink Customers?
A micro loan is a form of investment that’s usually used to finance small start-up businesses and allow them to hire personnel, buy equipment, and rent a property. They’re an excellent way for entrepreneurs to fund their projects, even when they have a not-so-impressive credit history. Others may need a micro loan to handle an emergency.
In most cases, the lender is either an investor or a group of investors that want to invest their money in other more practical ways than bank interests.
Why a Centrelink Customer May Need a Micro Loan
As a Centrelink customer who’s on disability pensions, age pensions, or other income forms, you only get a fixed amount of money each month. This means that a sudden emergency (especially if it’s midway through the month) can sometimes be a real issue for you. In that case, your best bet is to opt for a micro loan to handle the situation at hand.
How to Apply for a Micro Loan as a Centrelink Customer
As a Centrelink customer, you have two options when applying for a microloan, which are:
Applying Through Centrelink
Centrelink offers its customers small business loan for bad credit through the Human Services department, which can be used for home renovations, car bills, and medical emergencies. However, you can only apply for one micro loan Australia per year, and the nonprofit micro loans are issued in the form of advance payments that let you receive the next few months’ incomes in advance.
So, what’s the problem here? Well, for starters, you’ll be able to tackle your emergency now, but how are you going to pay for essentials if you won’t get any income for the next months? You’ll ultimately need to apply for a small business loan, anyway.
Not to mention, the application process of advance payments can be time-consuming, which brings us to the other way to apply for a microloan.
Applying Through an Independent Lender
Unlike other types of loans, you can apply for a micro loan online, which is one of the most significant advantages of micro loans. Here’s how the application process goes:
- Fill the submission form
- Specify the amount of money you need to borrow
- Wait for revision and approval
- A representative will contact you for more information
After approval, you’ll be presented with all the types of loans that you can pick from. They usually differ when it comes to the loan duration and whether you want to pay quarterly or monthly.
Can a Centrelink Customer With Bad Credit Apply for a Micro Loan?
Yes! In fact, a micro loan is one of the most favourable options for people with bad credit micro loans and specifically Centrelink customers. What’s more, some lenders who offer micro loans don’t even check your credit history. This can be a good opportunity for you to get a loan without letting your bad credit score come in the way.
Micro Loan Requirements for Centrelink Customers
Requirements for micro loans vary from one lender to another. Nonetheless, there are some basic requirements required by most lenders, which include:
- The borrower must be a citizen or permanent resident of Australia
- The minimum age for borrowers is 18 years old
- The borrower must have a stable job with a regular income in the past 90 days
- The borrower must have a working phone number or email address
- The borrower must have a bank account
Moreover, you can optionally use your property as a collateral that the lender can claim if you failed to pay the loan back. The best thing about this approach is that you can get a lower interest rate on your loan. However, if you don’t play your cards right, you may risk losing your property.
Pros of Micro Loans:
Here are some of the aspects that make can a micro traditional loan worth it:
- The application process is quick and straightforward
- They have less strict requirements than other types of loans
- The approval doesn’t take a long time
Cons of Micro Loans:
Just like with any type of loans, a micro loan has its own shares of disadvantages, which can be summed up as follows:
- They must be paid back with high interest
- They may damage your credit score if you don’t stick to your payments
To sum it all up, the application process of micro loans for Centrelink customers and microfinance loans Australia doesn’t differ much from if you weren’t a Centrelink customer. Just make sure that you know your options well and are aware of all the risks before making such a significant decision and have your repayment schedules all planned out beforehand.