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If I have a bad credit rating can I get a loan on the strength of my Centrelink payment?

Even if you have a bad credit rating, there are options for you when it comes to getting a loan when you need it. One of those ways is through a Centrelink advance payment. However, there are some things that you must keep in mind when it comes to your Centrelink payments and whether or not you can get a loan.

First of all, you can look into getting a Centrelink advance. This is especially handy if you do not need a loan that is of a large amount. It is usually difficult to get a large loan based on the strength of your Centrelink payment anyway. Although these payments are more reliable than your regular wages, the amount you borrow and how frequently you borrow is something that must be taken into consideration.

For example, you may get a Centrelink advance of $500 and need money again 5 months later. You will not be able to turn to Centrelink for an advance again. This means you need to think good and hard about whether or not to take this route. You also have to pay the money back. In other words, this is very similar to a payday loan, which is another option that you can use. You can visit a payday loan centre and simply have them give you a small advance until you are paid again. These programs work for individuals regardless of their credit history. They simply need a job, a paycheck, and a bank account.

Another option is non-conforming loans. There are lenders out there who will place ads stating that Centrelink clients are welcome. This means that they will accept Centrelink payments as a source of income and because of their reliability, this could strengthen your chances of getting a loan, but this still does not guarantee your chances. However, there are cases in which lenders will grant a non-conforming loan that will act as a small home loan. They will grant this based on the strength of your Centrelink payment. Then again, your bad credit rating could be an issue.

This isn't saying that you can't get a loan at all with your bad credit rating. It simply depends on how bad it really is. If you have shown promise by paying payments on time for a certain period of time that satisfies the lender, they may be more likely to grant you a non-conforming loan based on the strength of your Centrelink payment.

Just make sure you explore all of your options to make sure you find the best one for you. Assess whether or not you really need the money at this time. If not, work on your credit rating so that you can secure a lower interest rate in the future. Just by waiting a little while and focusing on your credit, you could save yourself hundreds or even thousands to tens of thousands of dollars in interest throughout the years depending on what kind of loan you have.

Other Question Categories

1. Your Credit Rating and Dealing with Bad Credit -> View All Questions

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