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If you're unemployed, lenders will still consider you for traditional personal loans, as long as you have some form of income. If you're receiving Centrelink payments you can still apply for an unemployed loan. There are also alternative loans specifically designed for unemployed applicants, or those who are struggling financially. Taking out a payday loan or short-term loan can be expensive and can lead to a debt spiral where you have to rely on these loans to pay for everyday expenses.
Are you struggling financially?
If you're struggling financially and would like to speak to someone for free financial advice, information and assistance you can call the Financial Counsellors hotline on 1800 007 007 (open from 9:30am to 4pm, Monday to Friday). If you are suffering financial problems related to the coronavirus pandemic you may be eligible for additional support.
⚠️ Warning about Borrowing
Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
Can you get a loan if you're unemployed?
An unemployed person can apply for a loan but will still need to earn an eligible form of income or have suitable income-earning assets to repay the loan. Acceptable forms of income may include Centrelink payments, self-employed earnings or regular deposits in an account from shares or something similar. However, only some lenders will consider unemployed applicants for a loan and you'll still need to meet the eligibility criteria to receive approval. Applicants may be required to provide bank statements and financial documents to verify whether or not they can repay the loan.
What eligibility requirements must be met for an unemployed loan?
The specific eligibility criteria will vary between loans, but lenders will typically consider the following when someone lodges an application:
- Ability to repay the loan. When reviewing applicants, lenders will consider whether or not applicants can afford to manage repayments. If an unemployed applicant is looking to borrow a small amount and their income and expenses prove that they can easily manage the ongoing repayments, they may be eligible. However, if they're looking to borrow a large amount of money that will be difficult to repay considering their current situation, they're less likely to be approved.
- Financial situation and credit history. Lenders consider credit history, credit score and financial situation when assessing an application. For example, people who are repaying other short term loans, currently in bankruptcy or under a Part 9 Debt Agreement may not be approved. Make sure to check the specific lender's eligibility criteria before applying.
- Eligible income. Some lenders will approve applicants who are receiving eligible government payments. For example, people receiving certain Centrelink allowances, such as a pension or parenting payments, may be able to include this as a percentage of their eligible income. For example, you may only be approved if no more than 50% of your income comes from Centrelink payments. Some payments, such as Newstart or Disability Support Pension (DSP), may not be accepted by some lenders. Again, check the lender's eligibility criteria before applying.
- Assets. If an applicant owns assets such as a vehicle or has equity in a property, the application may have a greater chance of being approved. This is because the lender may use this as security for the loan.
Find out about borrowing when you receive Centrelink
Which lenders consider unemployed applicants?
There are a number of different loan options for those who are unemployed, between jobs or receiving government benefits.
|Cash Converters||$50 to $4,600|
|Ferratum||$500 to $1,900|
|OK Money||$200 to $5,000|
|Wallet Wizard||$100 to $8,000|
What types of loans are available to unemployed applicants?
If you're unemployed and/or receiving Centrelink payments, there are a few loan options available to you:
- No Interest Loans Scheme (NILS). NILS, provided by Good Shepherd Microfinance, is a loan scheme that offers credit to families and individuals on low incomes. These interest-free loans can be used to pay for essential household items such as refrigerators, or utility bills and car repairs. They can also be used for some medical and dental services. The application process for these loans and the eligibility criteria involved is not stringent; however, applicants must prove that they are in need of these loans in order to be granted them.
- StepUP Loan. Good Shepherd Microfinance, in partnership with NAB, also offers StepUP Loans that vary between $800 and $3,000 at low rates starting from 5.99% p.a. Eligible borrowers will be required to have a Health Care or Pension card, and/or receive Family Tax Benefit A, as well as having resided in their current premises for more than 3 months.
- Joint applications, guarantors and cosigners. Unemployed applicants can consider applying with another person, such as a partner, relative or friend, to boost their eligibility. Some lenders accept joint applications, and brands such as Buddy Money encourage people to apply with a guarantor. Guarantors are generally required to be home owners with good credit scores, and to take responsibility for the loan if the borrower should default on their repayments.
- Overdraft. An overdraft is linked to a bank account and allows users to draw up to and including a certain limit, usually if there's an emergency. If you have a good credit history and a positive and/or longstanding relationship with your financial institution, you may qualify for an overdraft, even if you are currently unemployed.
What can I use an unemployed personal loan for?
You can use a personal loan for just about any legitimate purpose, depending on your circumstances. Some common uses of unemployed personal loans include:
Things to consider when making a loan application while unemployed
There are a number of factors to take into consideration when making a loan application if you are currently unemployed. These include:
- Repayments. First and foremost, it's important to consider whether or not you can afford to meet your loan repayments. While lenders are subject to responsible lending obligations, these obligations can change over time, sometimes making it easier or more difficult to borrow. It is your responsibility to ensure that you can afford to repay any credit that you borrow within the repayment period. If you're unsure as to what you can afford on your current budget, you can use our personal loan calculator to assist you.
- Credit history. If you have a strong credit history, you may still be eligible for a loan, even if you are unemployed. However, if you have poor credit or a bad credit score, it may be worth either spending some time improving it, or waiting until you have a form of regular income, before applying for a loan.
- Being offered a smaller loan amount. Loan providers will generally consider your income as a factor towards your eligibility for a loan. If you don't currently have a regular income, you may be offered a lower loan amount than you actually need, if you're approved. This can defeat the purpose of the loan if you can't borrow enough to pay for what you need to. Avoid signing a loan contract unless you are sure that the loan in question will meet your needs to save you from paying unnecessary fees and interest.
- Higher interest rates. If you're unemployed, you will most likely be offered a higher interest rate than applicants with regular employment. Borrowers without a consistent income pose a higher risk to lenders, as they are more likely to default on the loan. To mitigate this risk, lenders will charge a higher interest rate.
- Over-applying. Loan applications, and rejections, are recorded on your credit report and affect your score. Therefore, it's unwise to submit multiple loan applications. If you are rejected by a lender, it's a good idea to seek professional financial advice prior to submitting another application.
How to apply for a loan while unemployed
To apply for a personal loan when you are unemployed, you need to visit the lender’s website to fill out an online application form, or call them directly. In order to be eligible, you must be:
- Aged 18 or over
- An Australian citizen or permanent resident
You will also likely need:
- Proof of ID
- Details of and proof of address
- Information regarding your guarantor
- Details of loan security (for example, a vehicle or other asset of value)
How do I borrow money if I am unemployed? ›
- Apply with a co-signer. If your credit score is keeping you from being approved for a personal loan while unemployed, using a co-signer may help. ...
- Get a joint personal loan. ...
- Apply for a home equity line of credit (HELOC)
Yes, you can get a personal loan without a job, but it'll be more challenging, and you may pay higher interest rates. Lenders will also want to see that you have solid credit and an alternate source of income. Personal loans are unsecured loans, which means that they aren't secured by an asset, such as a car or house.Can I get a loan if I have no income? ›
If I don't have a job, can I still get a loan? Yes. Many personal loan lenders are willing to consider other sources of income. If you don't have income, you may be able to qualify for a loan based on your assets.What app can I borrow money from immediately? ›
- Empower: Up to $250 Advance. Finance.
- Hundy - Money When You Need It. Finance.
- SoLo Funds: Lend & Borrow. Finance.
- Vola Finance. Finance.
- Possible: Fast Cash & Credit. Finance.
- FloatMe: Instant Cash. Finance.
- Your Credit History. A strong credit history becomes very important for a successful application of a cash loan without income proof. ...
- Provide Alternative Income Proof. ...
- Apply with a Co-applicant. ...
- Build a Business Relationship with the Lender.
The easiest loans to get approved for are payday loans, car title loans, pawnshop loans and personal loans with no credit check. These types of loans offer quick funding and have minimal requirements, so they're available to people with bad credit.Will a bank give you a loan with no job? ›
It's possible to qualify for a loan when you're unemployed, but you'll need solid credit and some other source of income. Whether you are unemployed unexpectedly or by choice (in the case of retirement), lenders will consider extending you a loan as long as you can persuade them you can make regular payments on time.How can I get money urgently? ›
- Borrow From Chit Fund.
- Get a Personal Loan.
- Take Loan from P2P Lending Platform.
- Cash in on Unwanted Clutter.
- Borrow Money From Friends or Family.
- Withdraw Cash/Use Maximum Limit From Your Credit Card.
- Premature Withdrawal or Breaking of Fixed Deposit.
- Sell your Gold.