Centrelink Car Loans
Whether part or all of your income stems from Centrelink benefits, there may still be car loan options available to you.
For many of the approximately 2.4 million working-age Australians receiving some form of Centrelink income support payment (as of March 2025), having a car to get you from A to B is essential. It’s how you get to job interviews, medical appointments, school pick-ups and everything in between. If you’re receiving Centrelink benefits, finding a car loan may seem complicated. It doesn’t have to be, though.
With such a large portion of the population receiving income support, it’s no surprise that many lenders have adapted to meet this need. Whether you’re on JobSeeker, the Disability Support Pension, a Carer Payment or something else entirely, there could be options out there waiting for you.
Can I get a car loan on Centrelink?
Yes, you can get a car loan while receiving Centrelink payments. Many lenders, particularly specialist finance providers, are willing to accept certain Centrelink payments as a legitimate source of income when assessing your application. That said, your options may look a little different compared to someone in regular employment, and the rates and fees you’re offered could be higher.
Which Centrelink payments are accepted for car loans?
Here’s a list of payments that can typically be counted towards your income on a car loan application:
- Age Pension
- Carer Payment
- Disability Support Pension (DSP)
- Family Tax Benefits A and B
- JobSeeker Payment (in conjunction with wage income or family allowance payments only)
- Parenting Payment
- Service Pension for Veterans
- Special Rate (Totally and Permanently Incapacitated) Pension
However, it’s important to note that there are several payments that lenders won’t count on a car loan application. These include:
- ABSTUDY
- Austudy
- JobSeeker Payment
- Youth Allowance
These payments are all conditional on factors like your employment or study status and your age, which isn’t the case for the payments that are accepted. Every lender has their own criteria, though, so if you’re unsure whether your income qualifies, a broker can help you identify which option is the best fit for your situation.
Can I be approved for a car loan if 100% of my income is from Centrelink?
Yes, it’s possible to be approved if you’re unemployed and have 100% of your income coming from an eligible Centrelink payment, but it’ll depend on the lender and your overall profile. For example, you may be able to get approved with DSP being your only income source, but that isn’t the case for JobSeeker.
Above all else, though, lenders will still need to be satisfied that you can comfortably meet your repayments. This means that you’ll need to demonstrate that you can afford your repayments without causing financial stress.
How much can I borrow on a Centrelink car loan?
Most specialist lenders operating in the space can offer car loans between $5,000 and $10,000 to $15,000 to Centrelink recipients, though some may be willing to offer up to $20,000. The amount you’re approved for will come down to several factors, including:
- The type of Centrelink payment you receive and how much you get
- Your regular living expenses and existing financial commitments (such as other outstanding loans)
- Whether you have any other sources of income alongside your Centrelink payment/s
- Your credit history (with options available for Centrelink recipients with bad credit)
- Whether you’re a property owner, which can boost your borrowing power
As with any loan, keeping your loan amount realistic and in line with what you can comfortably repay will improve your chances of approval and help you avoid financial stress down the track.
What will my car loan interest rate be if I’m on Centrelink?
Interest rates will vary depending on both the applicant and their lender, but Centrelink recipients should expect to pay higher rates than borrowers in full-time employment without income support. Lenders factor in the perceived risk of lending to someone on a lower or less stable income, which is reflected in the rate you’re offered.
To give you a sense of how much your interest rate can impact the overall cost of your loan, here’s what a $15,000 car loan repaid monthly over five years would look like at a range of rates:
| Interest rate | Monthly repayment | Total repaid | Total interest |
|---|---|---|---|
| 12.00% p.a. | $334 | $20,020 | $5,020 |
| 14.00% p.a. | $349 | $20,941 | $5,941 |
| 16.00% p.a. | $365 | $21,886 | $6,886 |
| 18.00% p.a. | $381 | $22,854 | $7,854 |
| 20.00% p.a. | $397 | $23,845 | $8,845 |
Calculations and interest rates are for illustrative purposes only and exclude loan fees and other charges. Interest rates shown aren't necessarily reflective of the rates you'll receive on your car loan.
As the table shows, even a seemingly minor difference in your interest rate can add hundreds of dollars, if not more, to your car loan’s total cost. However, interest rate isn’t the only cost factor to be mindful of:
- Loan amount: the more you borrow, the more you’ll pay in interest overall
- Loan term: a longer loan term means lower monthly repayments but a higher total interest bill
- Deposit: paying a deposit means you’re eating into your savings more upfront, but you’ll cut down the size of your loan and therefore lower your interest bill
- Loan fees: an establishment fee and ongoing monthly fees are charged on most car loans for Centrelink recipients, which can add significantly to their overall cost
How to apply for a car loan on Centrelink
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1
Fill out our online application form
Tell us about yourself and your current financial situation, as well as the loan you’re after.
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2
Send through any necessary documents
We’ll need to see documentation to verify your current finances and your identity.
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3
Have a chat to your broker
Your broker will give you a call and discuss your loan options.
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4
Lock in your chosen car
If you haven’t already, we can help you find your car through our in-house car broker’s national dealer network.
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5
Get your application submitted
Once you’re happy to proceed, your broker will prepare your application for formal submission.
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6
Receive approval and settle your loan
You can be approved as soon as within one business day, after which we’ll handle loan settlement.
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7
Drive away
Simply sign off and the car is yours!
Why Us?
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We work hard behind the scenes to match you with a suitable lender and have your loan approved and funded in as few as 48 hours.
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Where ever you are across Australia, you can apply for a bad credit car loan using your laptop or even a smartphone.
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For more than a decade, we've been helping borrowers with bad credit get approved for their car loans across Australia.
Centrelink car loan eligibility and documentation
Eligibility
- You must be 18 years of age or older
- You must be an Australian citizen, permanent resident or eligible visa holder
- You must be employed and earning a stable income that supports your car loan payments, which can start from as little as $480 per week
- You mustn’t currently be bankrupt
- Your chosen car must satisfy your lender’s vehicle eligibility criteria
Documentation
- A valid driver’s licence, front and back (passports can also be accepted)
- Your two most recent consecutive payslips
- 90 days of bank statements and/or Centrelink income statements
Top Tips
Top tips for securing car loan approval on Centrelink
Show positive financial behaviour
Lenders will look at your bank statements as part of their assessment, so it's worth making sure your finances are in good shape before you apply. Making bill payments on time and limiting unnecessary spending can work in your favour.
Pay down debts where possible
Existing debts reduce your borrowing power, so paying these down as much as you can before you apply can improve your chances of approval. Even making a dent in smaller debts like credit cards or buy now pay later balances can make a difference.
Check over your credit history
You can request a free copy of your credit report through agencies like Equifax or Experian. Checking for any errors or discrepancies and having these corrected before you apply can help ensure your credit file is working in your favour.
Consider a cheaper vehicle
The less you need to borrow, the easier it is for a lender to approve your application on a Centrelink income. Opting for a more affordable vehicle will lower your loan amount, reduce your interest bill and improve your chances of getting across the line.
Get help from an expert
A broker who specialises in Centrelink car loans can match you with lenders that are most likely to approve your application, saving you time and protecting your credit score from multiple unsuccessful applications.
Common Centrelink car loan questions
How quickly can I get approved for a Centrelink car loan?
Approval times vary by lender, but we can help you get your application turned around as soon as within one business day. Having your documentation ready, including proof of Centrelink income, bank statements and ID, can help speed things along.
Can I get a car loan if I have bad credit and am on Centrelink?
Yes, it's possible to be approved for a car loan with bad credit while on Centrelink. Specialist lenders in this space tend to look at your overall financial situation, rather than focus on your credit score alone, so bad credit is far from the be-all and end-all.
Will a car loan improve my credit score?
It can, provided you make your repayments on time and in full. Consistent repayment history is one of the most effective ways to build or rebuild your credit score over time.
Can I get a Centrelink car loan as a single parent?
Yes, single parents receiving Centrelink payments such as the Parenting Payment or Family Tax Benefits can be eligible for a car loan. As with any application, approval will depend on your overall financial situation and your ability to comfortably meet repayments.
Will my car loan impact my Centrelink payments?
Taking on a car loan won't directly affect your Centrelink payments, but the repayments will reduce your disposable income, which is worth factoring into your budget. If you're unsure how a loan might interact with your specific payment type, it's a good idea to check with Services Australia.
Should I apply for a car loan with a guarantor if I'm on Centrelink?
Having a guarantor, someone who agrees to meet your repayments if you can't, can strengthen your application and improve your chances of approval. If you default on your loan, your guarantor will be responsible for the debt, so it's a decision that shouldn't be taken lightly by either party.
Sources
- Income support payments for the working age population – Australian Institute of Health and Welfare