Can I get a loan if I’m on a sickness benefit?
“Will you consider me if I’m not working? Does my benefit count as income? And if I can apply, how do I know I can afford to pay it back?”
You can ask us those questions before filling in a loan application. Yes, you may be able to get a loan while receiving a benefit because of illness or disability. At Crester, we consider applications from people receiving benefit income, subject to our lending criteria. We’ll need to understand your circumstances before we can say whether we can help.
You might need your car repaired so you can get to appointments, or have a washing machine that’s stopped working. When an expense can’t wait, you need clear answers about your options, what they’ll cost and what happens next.
“Do I need a job to be considered?”
Receiving a benefit doesn’t automatically rule you out. But having a regular payment coming in doesn’t automatically mean a loan will be affordable, either.
The question is what you can manage after paying for the things you already need: somewhere to live, food, power, transport, treatment and any debts you’re repaying.
It’s worth explaining anything that a bank statement doesn’t make obvious. Perhaps you’ve had several appointments close together, or a family member paid you back for something. Giving that context helps the lending team understand your budget.
If you want to check Crester’s loan options and requirements first, you’ll find those on our loans for beneficiaries page.
“I’m on Jobseeker Support. Is that the same thing?”
If you still call your payment the sickness benefit, you’re using a name many people recognise. The former Sickness Benefit was replaced by Jobseeker Support in July 2013.
Today, someone who can’t work for a while because of a health condition, injury or disability may receive Jobseeker Support. Supported Living Payment is a separate payment with different eligibility requirements, including for people whose ability to work is permanently and severely restricted. Work and Income explains the support available when your health affects your ability to work.
For your loan enquiry, use the name on your current benefit statement. If you’re unsure which documents show your payments, ask the team before spending time gathering paperwork.
“How much could I actually afford each week?”
Start with the money that reaches your account after deductions. Then look beyond the bills you paid this week.
What about the appointment next fortnight? The car registration due in two months? The extra heating you need when you’re spending more time at home? Those costs still need a place in your budget, even when they don’t appear every week.
A weekly budget example
Here’s an example. Say your household receives $650 a week and spends $560 on regular costs and existing repayments. That leaves $90. A loan repayment of $35 would leave $55.
But if you also need to put aside $25 for less frequent expenses, you’re down to $30. Would that be enough in a week when you need a taxi to an appointment or your power bill is higher than usual?
These are made-up figures to show how the calculation works, not benefit rates or an indication of what Crester would approve. The point is to give the repayment a place in your real life, including the awkward weeks.
Our guide to affordability assessments explains what lenders look at. Under New Zealand’s responsible lending requirements, a lender must make reasonable inquiries to be satisfied you’re likely to repay without substantial hardship.
“Is there help I should check before borrowing?”
Yes. It’s worth checking whether you can get assistance with the particular bill you’re facing. You may be able to borrow less, or avoid taking out a commercial loan.
Work and Income’s Advance Payment of Benefit can help eligible people with an essential or emergency expense, including some car repairs, appliances and dental costs. You have to pay an advance back, so ask how the deductions would affect your weekly payment.
A Special Needs Grant may be another option for certain urgent expenses. What’s available depends on the cost and your circumstances. Tell Work and Income what you need to pay for and ask which assistance applies.
If it’s ongoing medical costs that are squeezing your budget, check Disability Allowance. It can help eligible people with regular disability-related expenses, such as medical visits, medicines and travel. You don’t have to receive a main benefit to qualify.
There are also community options. Good Shepherd’s Good Loans are no-interest, fee-free loans for eligible people on low incomes, including for some essential purchases and services. They have their own assessment process and take time, so check the timing if your bill is urgent.
“What will the loan cost me altogether?”
Ask for the total amount you’ll pay back, as well as the weekly repayment. Both matter.
A longer loan term may bring the weekly amount down, but it can leave you paying interest and ongoing fees for longer. A personal loan that looks easier week to week may cost more overall.
Before signing, you should be able to answer these questions:
- How much money will I receive?
- What interest rate applies?
- Is there an establishment fee or a monthly admin fee?
- How many repayments will I make, and what will they add up to?
- What could I be charged for a missed payment or for paying the loan off early?
Crester’s rates and fees page sets out our published charges, including the monthly administration fee. For example, the current schedule lists a $135 establishment fee for a loan of $800–$1,000 and a $10 monthly administration fee for a single borrower. On a small loan, those fees can make a noticeable difference to the total cost. Read the schedule alongside your individual offer. You can also use our repayment calculator to explore estimates before speaking with us.
“Will I need to use my car as security?”
Crester’s beneficiary lending requires acceptable security or a suitable guarantor. Ask the team what would be needed in your circumstances before applying. If an offer involves your car or another asset, ask exactly what you’re agreeing to and what could happen if you fall behind.
This deserves a careful conversation when your car is how you get to medical appointments or collect groceries. Think through what losing access to it would mean for you.
If a guarantor is involved, they need to understand their responsibilities too, including when they could be asked to pay and how much they could owe. Neither security nor a willing guarantor makes an unaffordable repayment manageable.
“What if my credit history isn’t great?”
Ask about the lender’s criteria before making a full application. Receiving benefit income and having a poor credit history are different issues, and lenders assess both alongside the rest of your circumstances.
A useful first question is: “Can you explain whether you consider someone in my situation, and when you’ll run a credit check?” That lets you understand the process before applying to several places.
Your credit score isn’t the only information that matters. Consumer Protection explains how missed payments, defaults, existing debt and recent credit applications can affect a lending decision.
“What happens if I get worse and can’t keep up?”
That’s worth asking before you take out the loan, particularly if your health or costs can change from month to month. Ask who you should contact and what repayment options may be available if things become difficult.
If you already have a loan and you’re worried about the next payment, contact the lender early. Explain what’s changed. An unexpected serious illness or injury may provide grounds for a formal hardship application, depending on your circumstances and the applicable requirements. This guide to payment problems explains the process.
And if you’re borrowing to cover a shortfall that happens every week, it may help to talk the whole budget through with someone first. MoneyTalks offers free support and can connect you with a financial mentor. You don’t need to have worked out a solution before getting in touch.
“Can I talk to someone before I apply?”
Yes. Contact the Crester team and tell us what you need help with. You can start with a straightforward question: “I receive a benefit because of my health, and I need to cover this expense. What would you need to know before I apply?”
Have the bill or quote nearby if you can. We can explain the information needed for an assessment, which may include identification, proof of benefit income, bank statements and details of any proposed security.
You should have time to understand an offer and ask questions about it. Any loan is subject to our lending criteria and an affordability assessment.
This article provides general information. The assistance and lending options available depend on your circumstances.
by Ash Horton
October 20, 2020
Ash is a professional content writer with extensive experience in business development in the financial services. Ash has founded businesses from the age of 19, including franchising ventures, and has worked alongside major retailers.
