Car Loans on Centrelink

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.