Low income loans

Loans for low income borrowers include short-term loans, small personal loans and Centrelink cash advances, with lenders ranging from traditional financial institutions to alternative finance lenders. As every loan has different rates, fees and requirements, comparing a variety of options can help you figure out what is suitable for your circumstances. This page goes through some of the different loans available, as well as what to think about before deciding whether or not to apply.

⚠️ 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.

What personal loan options do I have if I have a low income?

• Personal loans for small amounts. Some lenders and traditional financial institutions offer personal loans for low income applicants as long as the amount requested is small.
• Short-term loans. A short-term or payday loan offers small amounts of funds over a limited period of time, typically between 2 and 12 months.
• Centrelink advance payments. If you receive Centrelink payments, you may be eligible to get some of the payment early. This is known as an advance payment, which is then repaid out of future Centrelink payments.
• Low income credit cards. Some lenders offer low income credit cards if you can prove you meet minimum income requirements, usually at least $15,000 p.a. However, low income credit cards may have high interest rates, annual fees and other costs that can increase the risk of debt.
• Alternative loan options. Other low income loan options include payday loans and no-interest loans from Good Shepherd Microfinance as part of their No Interest Loans Scheme (NILS) program. Here, you may qualify for anywhere from $300 to $1,200 and are only responsible for paying back the borrowed quantity, meaning no interest or fees.

Compare a range of short term loans

What income do I need to get a loan?

Although some lenders list a minimum income requirement, other lenders do not. If a lender sets no minimum income requirement, then look at the other requirements to make sure you meet them.

• Short term loans
• Personal loans

How to compare low income loan options

Make sure you take the following factors into consideration when comparing different loans:

• Interest rate. Interest charges add to the overall costs of borrowing money, so it's essential to check this rate and compare it to other options. Also, be aware that with variable interest rates, the lender could change the rate you pay on your loan.
• Comparison rate. The comparison rate takes into account both the lender's interest rate and other fees charged with the loan. This can help you get a better idea of the overall cost of a loan.
• Fees and charges. These include ongoing fees such as monthly or annual service charges, as well as one-off fees such as application fees and early repayment fees.
• Loan term. This is the length of time in which you’re required to pay back the loan. Personal loan terms can range from a few months (for short-term loans) to five or more years.
• Repayments. Loan repayments are typically monthly, fortnightly or weekly for a set amount of money. This makes it important to check the required repayment amount before applying. It's also worth checking whether or not a lender accepts additional repayments or variations.
• Minimum and maximum amounts. Loans may have requirements around the minimum and maximum amount that can be borrowed. This is an important feature to check so that you can make sure you don't borrow more (or less) than what's required.
• Secured vs unsecured. Some lenders may require collateral – such as a home or business equity – as security for your loan. This means if your loan goes into default status, your lender has the right to seize any collateral you have committed as security for the borrowed money.

What to watch out for

• Falling into too much debt. Make sure you avoid a situation where you get into too much debt. This means you must carefully weigh your future monthly income with your monthly repayments on any loan you commit to. Also, make sure to avoid applying for a loan amount that’s more than what you actually need.
• Applying for too many credit products. Lenders can see exactly how many times you’ve applied for loans. Applying for several loans within a short period of time increases the risk for lenders, which can make it harder to get approved.

Have more questions about borrowing on a low income?

What if I’m unemployed?

It may be possible to qualify for certain types of credit if you can show you receive some sort of income, whether from Centrelink payments, self-employed income, or other forms of regular deposits into your bank account such as share payments. Find out which lenders may consider applicants who are unemployed.

How much can I apply for?

This depends on the particular lender and type of loan you’re applying for. Keep in mind that applying as a low income borrower would likely mean you’d qualify for a lesser amount than a borrower with normal income.

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