Written by You may be able to get a car loan if you receive a pension or benefits from Centrelink, even if it’s your sole source of income. If you meet all your lender’s criteria, you can still be approved. Find out more about the requirements for these loans and, if you’re ready to buy, apply for car finance with Savvy today!
What Centrelink benefits are accepted on car loan applications?
Here are the benefits that can be accepted as income on your application:
- Age Pension
- Disability Support Pension
- Parenting Payment
- Carer Payment
- Service Pension for Veterans
- Family Tax Benefits A and B
- Special Rate (Totally and Permanently Incapacitated) Pension
- JobSeeker Payment (in conjunction with wage income or family allowance payments only)
Not all payments are accepted, though. Here are some examples of income sources that won’t be counted towards your income:
- JobSeeker Payment (on its own)
- ABSTUDY
- Austudy
- Youth Allowance
It’s important to understand that just because you receive one of the above accepted payments doesn’t mean you’ll automatically be approved. Lenders consider a range of factors when assessing your application, which we’ve listed below.
How can I get a car loan on Centrelink?
If you receive Centrelink benefits, you can apply for a car loan with Savvy. However, whether you’ll be approved for a car loan and how much you can borrow depends on several factors. These include:
- Meet the eligibility criteria: you’ll have to meet your lender’s requirements in relation to things like age, minimum income, residential status and more. These can vary but will largely stay consistent between lenders. We’ll get into those criteria a bit later.
- Show that you can afford the loan: of course, you’ll have to be able to support your loan payments. If your lender can see that it won’t be a problem for you, you’re much more likely to be approved.
- Supply all the required documents: you’ll need to provide proof of identity and income when applying with us. You may also need to provide a Centrelink Income Statement.
- Make sure your credit is up to the mark: assess your credit score before you apply. If it isn’t the best, your options will be more limited. That doesn’t mean you can’t still be approved, though; we’re partnered with lenders who offer bad credit car loan solutions.
Can I still get a car loan with bad credit?
Yes – getting a car loan with bad credit is possible, even when receiving Centrelink payments, but it’ll require some extra effort. All reputable lenders in Australia will perform a credit check when you apply for a car loan.
These checks help lenders assess your financial responsibility and the risk of you defaulting on the loan. Essentially, it provides a snapshot of your past borrowing behaviour and ability to repay debts.
A higher score indicates a lower credit risk, while a lower score suggests a higher risk. In Australia, the credit score ranges for the three main credit reporting agencies are:
| Equifax | |
|---|---|
|
Below average |
0 – 459 |
|
Average |
460 – 660 |
|
Good |
661 – 734 |
|
Very good |
735 – 852 |
|
Excellent |
853 – 1,200 |
| Experian | |
|---|---|
|
Below average |
0 – 549 |
|
Fair |
550 – 624 |
|
Good |
625 – 699 |
|
Very good |
700 – 799 |
|
Excellent |
800 – 1,000 |
| illion | |
|---|---|
|
Zero |
0 |
|
Low |
1 – 299 |
|
Room for improvement |
300 – 499 |
|
Good |
500 – 699 |
|
Great |
700 – 799 |
|
Excellent |
800 – 1,000 |
You can apply for a free copy of your credit report every three months, which is usually accessible online or by email or post.
Can I get a no-interest car loan on Centrelink?
Good Shepherd Australia New Zealand offers No Interest Loans (NILs), which is a scheme providing low-income households and individuals with short-term loans to cover essential expenses. A pilot program has been run for loans up to $5,000 for the purchase of vehicles but, as of July 2024, it’s on hold. Good Shepherd says that this program will reopen once their backlog is cleared, so you may be able to take out a NIL for your car.
In the meantime, you can still apply for interest-free loan through Good Shepherd’s NILs for Essentials program, which allows you to borrow up to $2000 for essentials such as car repairs and registration costs. These loans have no credit checks, but you will need to provide details about your financial situation and information on any existing debts.
How can I improve my chances of getting a car loan while on Centrelink?
Yes – Good Shepherd Australia New Zealand offers No Interest Loans (NILs) for vehicles. However, these are only available to eligible applicants for up to $5,000. You’ll need to show that the loan is affordable for you and meet at least one of the following criteria:
- You earn no more than $70,000 (single) or $100,000 (with partner or children)
- You have a Pension or Health Care Card
- You have experienced domestic or family violence within the last ten years
If you don’t meet any of the above criteria or need to borrow more than $5,000 for your car, you won’t be able to take out a no-interest loan. When you apply with Savvy, though, we’ll give you the best shot at approval with one of our lending partners.
Top tips for maximising your car loan approval chances on Centrelink
How to apply for your car loan with Savvy
Car loan eligibility and documentation
Centrelink car loan FAQs
Defaulting on loan payments can result in late fees, penalties and ultimately repossession of the vehicle by the lender. This can further impact your financial situation and credit score, making it even more challenging to secure loans in the future. It's essential to communicate with your lender if you're facing financial difficulties to explore potential options for repayment plans or assistance programs.
It's possible to get a car loan while on Centrelink with existing debts, but it may affect your eligibility and loan terms. Lenders assess your debt-to-income ratio to determine your ability to manage additional debt responsibly. If your existing debts take up a significant portion of your income, lenders are likelier to offer higher interest rates or lower loan amounts.
Yes – we can arrange financing for casual workers, provided you’re earning a relatively stable income and meet one of our lenders’ minimum criteria. Your Centrelink income will still need to meet their requirements to be included as income on your application.
Yes – if you’re moving from full-time employment to another full-time job, we partner with lenders who can approve applications as soon as you start at your new workplace. Part-time employees will need to have been in the same job for at least three months. Casual workers will require a minimum of six months of consistent income from the same job.
All of this is related to job stability and the potential for your income stream to dry up. If you’ve completed your probationary period or have stayed in the position for a long time, your income is seen as more reliable.
Yes – although a car loan won’t help you cover the cost of repairs, a personal loan will. This is another option available to borrowers who’ve struggled with their credit in the past. With a personal loan, you can essentially spend the funds however you like, rather than being tied to a car purchase. You can apply for a personal loan with Savvy today, too!
No – you won’t be able to take out a car loan with Centrelink directly. However, you may be eligible for an advance payment, which gives you access to your future payments early. The amount extra that you’re paid then comes out of your future payments.
It can – outstanding payday loans (or a history of several in a short timespan) may negatively impact your chances of approval. Paying off any small loan debts before you apply can help this. Speak with your Savvy consultant about your options when you apply with us.
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