It’s very possible to get a loan as a low income earner in Australia. There are plenty of lenders that work with borrowers who don’t take home much from their job or other sources. However, as a low income earner, it may be more difficult to get approved compared to someone earning a higher income. That’s what makes knowing where to apply so crucial.
How can I get a loan with a low income?
Applying with the right lender is essential. You should always check the eligibility points before you apply, as this can tell you off the bat if you don’t qualify. First and foremost, you’ll need to meet your lender’s minimum income requirement, as well as the following key criteria:
- You must be 18 years of age or older
- You must be an Australian citizen, permanent resident or accepted visa holder
- You must meet your lender’s minimum credit score requirement
- You must be earning a stable income deposited into your bank account
- You mustn’t be bankrupt or under a Part IX debt agreement
- You must have a valid Australian phone number, bank account and email address
What is the minimum income required for a loan?
The minimum income requirement on your loan depends on who you’re applying with, as different lenders will set different minimums. Savvy is partnered with lenders who can offer loans to those earning as little as over $480 per week (including accepted Centrelink benefits). This translates to more than $24,960 per year.
When you apply with Savvy, we’ll only match you with a lender whose requirements you meet.
How much can I borrow as a low income earner?
In simple terms, you can borrow as much as you can comfortably afford to repay. As a low income earner, that means your loan borrowing power will probably be lower, given you’ll have less left over after expenses are deducted than someone making more money than you. You likely won’t be able to borrow the maximum of $75,000 for unsecured loans, as this’ll be reserved for those earning enough to comfortably manage their repayments.
However, there’s a range of other factors that can impact your borrowing power, including:
- Your credit score
- Your current assets (such as your home or car) and liabilities (such as other loan debts and credit card limits)
- Whether you have any dependants
- Whether you’re applying on your own or with your partner
If I receive Centrelink benefits, can they go towards my income?
Yes, it’s possible to get a loan while receiving Centrelink payments. We work with lenders who can accept a combination of both employment income and Centrelink benefits. However, the benefits that can be counted towards your income must be stable and consistent. These can include the following:
- Age Pension
- Carer Payment
- Child Care Subsidy
- Disability Support Pension
- Family Tax Benefits
- JobSeeker (in conjunction with wage income or Family Tax Benefits)
- Parenting Payment
- Service Pension
- Single Parent Payment
Payments such as ABSTUDY, Austudy and Youth Allowance aren’t accepted on their own or at all, as they’re conditional on factors like your age, study and employment status.
What are my other low income loan options?
The most common alternative to a personal loan for a low income earner is a cash loan. These are loans of up to $5,000 that can be approved and funded quickly, as soon as the same day in many cases, and used however you like. This will be your main finance option if you’re earning less than the minimum required amount for a personal loan.
If you’re on a low income, these loans typically have more flexible borrowing criteria than personal loans. Lenders are often willing to look beyond issues such as certain black marks on your credit file as long as you can show that you’re in a position to repay your loan debt.
It’s worth noting, though, that the fees and interest on these loans are much higher than what you’d pay on a personal loan. You’ll have to pay an establishment fee of up to 20% of your loan amount (capped at $400) and monthly fees of up to 4% (or interest up to 48.00% p.a. on loans above $2,000).
Applying for your low income small loan with Savvy
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Fill out our online form
Share information about yourself and your finances, as well as how much you want to borrow.
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Receive an instant outcome
We’ll run your answers by our partnered lenders and, if there’s a match, you’ll receive conditional approval.
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Have your application assessed
From there, your lender will formally assess the application to see if a loan is right for you.
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Get approved and receive your cash
Once you’re approved, simply sign off and the funds can be sent straight to your bank account.