Centrelink Loans to Avoid and Loans to Consider

Generally those who are on Centrelink need to be extra vigilant with their personal finances, especially when it comes to loans. When collecting government benefits or being on a low fixed income, money can be tight and hard to come by.
The temptation to borrow money from willing lenders at a high cost (fees & interest) should be avoided as this is a quick way to plunged into debt whilst ruining your credit rating if your late or miss repayments.

One thing individuals and families on a low income should be very mindful of, is using good money to obtain bad money. Bad money are funds that have the ability to put you in a worst position and have a high cost to access.

Small loans aimed at Centrelink providers such as certain types of secure loans or payday loans should be avoided. In an emergency situation or a rare unique circumstance that requires immediate funds, a payday loan may be an option.
However, relying on them as a general source of funds can be dangerous and an example of how this borrowing practice can get out of hand can be found here – “Debt traps in payday loans”

The Australian government also provides some great insight in regards to small loans and the potential dangers of borrowing from this type of lender.

 
Whilst it may seem payday loans are the only option available to Centrelink recipients – There are better options available

There are many government and non-profit initiatives set in place to help with a variety of financial hardships – ranging from emergency funds to ongoing financial support. There are so many great programs for those on welfare needing financial assistance.
A great example of this is the Household Assistance Package; This project is wrapped around the clean energy future and provides increased benefit payments to individuals, families and pensioners. It also provided tax cuts which were put in place back in July of 2012 where the tax free threshold was increased to $18,200.

Looking for financial assistance through the government and non-profits should be a first reference point when looking for help with money. Always do your due diligence when it comes to finances and potentially signing a contract and don’t let your emotions cloud your judgement, there is always help out there if you know where to look.