Loans for the Unemployed Explained
Nowadays, many people have found themselves being out of a job for various reasons. While they are able to get government benefits from Centrelink, they can still face unexpected bills such as car repairs or household appliance maintenance, and they need a cash loan to solve the problem.
Unemployed people tend to think that they will not be approved for a loan, and it's even worse if they have a bad credit score. However, there are many lenders online who still consider loans for the unemployed, focusing on their income rather than credit rating, and tailoring a loan repayment plan to help them meet their budget.
Can I Get a Loan for Unemployed People With Bad Credit?
Most traditional Australian banks and financial institutions require a credit score of around 700 and will not really approve loans to unemployed people with bad credit. But there are still many lenders who are willing to offer cash loans for bad credit as long as borrowers can show that they are able to repay the loan on time and still cover their regular household expenses.
What's more, you can even use a bad credit loan to build your credit since making payments on time on a loan will gradually improve your credit score, so it will be easier to get approved for a loan in the future.
Can I Get a Loan for Unemployed While on Centrelink?
If part of your income (less than 50 percent) is from Centrelink social security benefits you can certainly apply for a cash loan even with bad credit. The important point that lenders look for is a stable income, and there are a number of benefits that are recognized as regular income, including:
- Aged Pension
- Disability Support
- Veterans Pension
- Family Tax Benefit
- Child Care Subsidy
- Jobseeker allowance supplementing Family Tax benefits
However, not all benefits are eligible for a Centrelink loan, as below:
- Usual Jobseeker Payments
- Youth and Study Allowances
Where Can I Find Loans for Bad Credit While Unemployed and on Centrelink?
There are two main ways of getting a cash loan, and both of them come with their merits and demerits:
From a Direct Lender
You can do an online search to find a direct lender who will lend to a Centrelink customer with bad credit. The advantage of a direct lender is that you just deal with one company, although this is also a disadvantage since you may need to contact various loaning companies to compare terms and conditions, and this can be time-consuming, having to fill out various application forms and then wait for the approval.
Through a Loan Broker
A much quicker and easier method to find an online lender is through an online broker like WeLoans. With one simple form, you will be connected to a wealth of lenders in our network who can quickly send you various loan offers that you can compare at the convenience of your own home to find the best deal. We can help you find lenders who are happy to work with Centrelink customers, even with bad credit.
How Much Can I Borrow From Loans for Unemployed People if I Live on Centrelink Benefits?
Many Australian lenders offer both unsecured Small Amount Credit Contracts (SACCs) and secured or unsecured Medium Amount Credit Contracts (MACCs) to borrowers who receive part of their income via Centrelink benefits. Online application is straightforward, and loan providers look to make funds available instantly.
SACCs range from $300 to $2,000 with repayment periods between 16 days and one year. Fees are fixed and capped as a percentage of the loan amount. MACC loans go from $2,001 to $5,000. Borrowers can choose a repayment period between 16 days and two years and MACC fees are also capped.
Find more details about SACCs and MACCs here.
How Can I Use a Bad Credit Loan on Centrelink?
A bad credit loan on Centrelink can be used for whatever you need, but mostly they are used to cover emergency situations and unexpected bills. Here are some examples of typical situations where you may need a loan while on Centrelink:
These days there are things that you really cannot do without, like a fridge, freezer, or oven. If an appliance breaks down you really have to repair or replace it straight away, and a quick cash loan can help with that.
When looking for a job, it pays to have your own transport so you can get to interviews on time. But what happens if your car breaks down? Obviously, it has to be fixed urgently, and if you are already struggling financially, it puts you in a difficult situation. An emergency cash loan can solve this problem and get you back on the road.
Moving house can be very expensive, especially if you are renting. You have to cover the furniture removal costs and also the new rental bond, which is usually paid upfront before you have received the bond back from your previous rental. In this case, a fast loan or a bond loan is what you need to get you through the stress until you have everything sorted out.
To most of us, our pets are part of the family, and if anything happens to them such as an illness or accident, they need urgent treatment. It is important to know that you can get a loan to cover the cost of the veterinary bill, even if you are unemployed and have a poor credit score.