Registered migration agent Julie Williams told SBS News waiting times had become an "ordeal".
"It's starting to turn people off as to, really, 'does Australia want me?' Because, you know, 'I'd like to give back, but, if they're not allowing me to become a citizen ... It's quite a sad situation," she said.
Ms Williams said access to study and certain jobs are just some examples of the issues caused.
"Their ability to, perhaps, attend university, apply for government jobs ... We have a lot of clients with children who have gone all the way through high school in the Australian education system and want to join the armed forces but can't because they haven't got their citizenship."
Sona Iplani and her family were granted citizenship this month after being on the waiting list for 10 months - what is now considered relatively fast.
"I think it's more than a paper. It's like officially feeling at home. While India will always be my first home, but then, having said that, I've now embraced the beautiful culture and the country and the people here in Australia," she told SBS News.
Minister for Citizenship and Multicultural Affairs Alan Tudge said the length in processing time was due to several factors such as "there are much greater national security threats today than before".
He also blamed the "processing of the 50,000 people who arrived unlawfully by boat in the Rudd-Gillard-Rudd years".
"A significant number of these people who received protection visas, have since applied for citizenship. Many of the applications had limited or no identity documentation to verify who they are.
"The processing of these cases uses a huge number of resources which then delays processing times overall."
And processing times could soon be even longer, with the government pursuing tougher hurdles to citizenship, including extending the waiting period for permanent residents to four years.