Centrelink Loans for Single Parents
With all the bills, expenses, and instalments that have to be paid throughout the month, things can be really hard, especially if you’re a single parent.
Read on to learn all about Centrelink loans for single parents.
What Is a Centrelink Loan for Single Parents?
A Centrelink loan can either be a loan that you borrow from Centrelink or a loan that you borrow from another financial institution but pay back with the benefits of Centrelink payments.
If you receive Centrelink benefits, it wouldn’t change the application process for applying for the loan. Firstly, you’ll need to provide the money for the deposit, apply for the loan, and then repay the amount with a monthly instalment with the added interest.
However, with Centrelink payments, the lenders might narrow down the eligibility criteria or make them stricter.
How Does a Centrelink Loan Work?
Most institutions will allow you a period between 5 months (minimally) and 5 years (maximally) for the centrelink start up loan duration or term, and an APR (Annual Percentage Rate) varying between 12% and 48%, depending on your credit score.
You’ll also be required to cover the establishment fee, which is typically $400. So, when calculating the cost of the loan, you have to add the principal amount, the amount you’ll pay in interest over the term of the loan, and the extra fees or charges that are associated with borrowing a quick centrelink loan.
Who Is Eligible for a Centrelink Loan for Single Parents?
To be eligible for a Centrelink loan, the following has to apply to you:
- Being 18 years old or older
- Being an Australian citizen or permanent resident
- Having a regular source of income, with the preference for stable jobs
- Having a solid credit score and a clean credit history with no delays or defaults
- Proving that your payments are regular and receivable in the long-term
Is There a Minimum Income for Centrelink Loans?
While there isn’t a minimum income, the centrelink small business loan amount would definitely be proportionate to the income. In fact, a single parent’s disposable income is one of the most crucial eligibility criteria for a Centrelink loan.
The disposable income is what remains in your account after taking away expenses and other repayments of debt, and this disposable income is what will be used to repay the loan.
What Are the Centrelink Benefits That Lenders Accept?
If you’re applying for a car loan on centrelink with Centrelink benefits, a lender may accept Pars A and B of Family Tax Benefits (FTB) as a portion of your income. Some lenders may even accept the FTB extension known as the Large Family Supplement.
The most important part is to meet these standard requirements:
- Having children that are younger than 11 years old, as the number of lenders willing to give you loans decreases if your children are older
- Submitting your Centrelink statement in its entirety, including blank pages (if any)
There are some lenders that do not accept furniture loans centrelink because they might fear they may be discounted in the case that your circumstances change.
Can I Borrow a Centrelink Loan for Single Parents on Bad Credit?
You might worry that you won’t qualify for a hardship centrelink loan if you’re an unemployed single parent with bad credit, but there are some institutions that would still give you a loan under these circumstances.
However, you might have to opt for a secured loan, in which you’ll provide collateral. This means that the collateral you provide might be taken away from you in the case that you default or are unable to pay the loan back.
Alternatively, you can opt for an unsecured loan with relatively higher interest rates. The risk with this route is that you’ll often have to bear the brunt of unreasonably hefty interest rates, which might add up in a way that exceeds the actual benefit you get.
Another problem is that in the case that you delay the payment or default, extremely high-interest rates will be imposed on you.
While it’s pretty tough to deal with finances if you’re a single parent, don’t get tricked into secured loans bad credit on centrelink that you won’t be able to pay back in the long run.
Always make sure you take out an amount that your Centrelink benefits and payments will be able to cover; otherwise, you’re signing yourself off into a worse financial situation.