One of the major financial dilemmas for families or individuals collecting welfare benefits is the ability in obtaining loans from banks or other lending institutes. There aren’t many options available and one of the more popular choices, payday loans, isn’t very practical. They generally have high fees and interest rates attached to them along with short repayment periods.
They tend to be more popular as there are limited alternatives for getting cash. Although they may not be the ideal choice, they can be useful in emergencies and as long as you have the means to make the repayments.
Luckily, there are other organisations both government and non-profit who provide loans for people on welfare that are in need of financial assistance.
Depending on what arrangement you have with Centrelink, they have multiple options to assist Australians with financial assistance. They may include but are not limited to the following;
Advanced Payments: This allows Centrelink beneficiaries the ability to receive part of their normal payment in advanced in a lump sum. It is a great way to address money issues without taking a loan.
No Interest Loan Scheme: This allows you to obtain up to $1200 for important household needs such as furniture, appliances and other important living necessities.
Micro-finance Options: One of the most popular organisation that provides these loans is the Good Shepard. They have partnered with various banks to provide special financial products for low income earners and those who collect Centrelink benefits. The different products include NILS (as mentioned above), StepUp, AddUps and other products based on State/Territory.
Non-Profits: Most communities throughout Australia have different non-profit organisations that provide different forms of financial or non-financial aid. Check with your local community centres or church to gain access to them.
Specialty Lenders: There aren’t many options here if a borrower’s financial income is solely from welfare. Generally these lenders would require some form of income in addition to the welfare benefits.
If you don’t have a non-Centrelink income and are in need of funds, depending on the urgency, it might be worth while looking at alternative methods of obtaining money before applying for loans, such as the Advanced Payments method. There are other ways to get help with moneyfor people on Centrelink benefits beyond loans. Applying for loans that you most likely won’t qualify for can have a negative impact on your credit score, especially if you apply to multiple lenders in a short period of time.
Financial Counselling Australia: This is a free service to Australians who are having financial difficulties and are in need of some professional help. They provide free, independent and confidential service to help get individuals and families through financial hardship.
This article was brought to you be SimpleLiving Australia, a personal finance blog which aims to provide readers with tips and financial information to make informed decisions. While certain info in this article may be specific to Australia, many of its tips are applicable anywhere.