Find out the loan options available to pensioners and the eligibility criteria that apply.
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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. Find out more here: https://www.finder.com.au/coronavirus-financial-help
⚠️ 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 loan options do pensioners have?
Loans that are available will depend on your financial situation and also the type of pension you receive. Here are a few options that people on the pension can consider:
- Your existing bank. If you've held an account with your bank or credit union and have a good history with it, this may be a good place to start. You can visit in-branch to discuss your options and find out what loans might be available.
- Low doc personal loans. These loans are designed for self-employed applicants or for borrowers whose incomes are tied up in investments. Keep in mind that these loans usually come with higher interest rates and will normally only let you borrow up to 80% of the property price.
- Short term loans. These are small loans that are repaid in the short term. You can usually borrow between $100 and $2,000 for a period of 16 days up to 1 year. Your income and expenses will be verified before your loan is potentially funded. Keep in mind these loans come with much higher fees and shorter repayment periods than other standard personal loans, and can involve many extra charges.
- Bank loans. Some banks, such as those listed in the table above, consider applicants receiving the disability pension or age pension. You will usually need to meet minimum income criteria to be approved.
- Loans for retirees. These are loans that are specifically designed for people who receive the age pension, are self-funded retirees, or are pensioners. Follow the link below to find out more about retired loans.
- Borrow up to $2,000
- Get a decision in minutes
- Flexible repayments
100% confidential application
Credit24 Short Term Loan Offer
Credit24 offer a fast and easy online application for up to $2,000. You can apply 24/7 with a good credit rating and employment to be approved.
- Loan amount: $2,000
- Loan term: 6-12 months
- Turnaround time: Same day - conditions apply
- Fees: 20% of loan amount establishment fee + 4% of loan amount monthly.
- You must earn $600 p/m
- Quick and easy Approval of your loan with good credit
Some of the brands that consider pensioners for a loan
|Brand||Can pensioners apply?||What conditions are there?|
|Cash Converters||Your loan repayments cannot exceed 20% of your income from the pension.|
|Cash Stop||You're able to apply.|
|ClearCash||You're able to apply, applications are handled on a case-by-case basis.|
|Credit24||At least 50% of your income needs to come from outside of Centrelink payments.|
|Ferratum Loans||You need to earn 50% of your income from outside of Centrelink payments.|
|Good to Go Loans||You're able to apply, applications are handled on a case-by-case basis.|
|Nimble||You need to be employed and your primary source of income can't be from Centrelink.|
|Rapid Finance||You're able to apply, applications are handled on a case-by-case basis.|
Banks that may consider you for a loan
|Brand||Can pensioners apply?||What conditions are there?|
|ANZ||You need to earn $15,000 p.a.|
|Bank of Melbourne||Age pension and DSP are accepted.|
You'll need to provide a letter from Centrelink detailing your pension payments.
|BankSA||You're able to apply, applications are handled on a case-by-case basis.|
|Bank Australia||You're able to apply, applications are handled on a case-by-case basis.|
|Bankwest||DSP and parenting payments are accepted.|
You'll need supplementary income to be able to apply.
|Bendigo Bank||You need to be in regular, paid employment.|
Centrelink payments are accepted with supplementary income.
|Citibank||You need to earn $40,000 p.a.|
Age pension is accepted. You can apply if your pension income is taxable.
|Commonwealth Bank||You need to earn $14,000 p.a.|
Parenting payments, DSP and carer's pension are accepted.
|NAB||Some Centrelink income is considered.|
You need to demonstrate you can afford the loan repayments.
|St.George||Parenting payments and DSP are accepted.|
|Westpac||You need to earn $35,000 p.a. DSP is accepted.|
What are the risks of no credit check loans?
- Unreputable lenders. Check the lender has a credit licence and is not charging you more than ASIC allows. The lender should be easily contactable.
- Unaffordable repayments. Consider the size of the regular repayments and ensure the loan is able to be repaid during the loan term. If not, extra fees apply to extend it. Be careful, since repayment periods for these kinds of loans tend to be shorter than regular loans.
- Multiple applications. Every loan application shows up on credit reports. While lenders might not consider credit history, several applications within a short period can have a negative impact on your credit score moving forward.
- Check rates and fees. Establishment and monthly fees are capped, so be wary of lenders quoting prices beyond the legal maximum amounts. Be crystal clear on what will be charged for late payments or a default on the loan. The total cost of the loan matters here - lenders can charge interest rates on top of everything else.
- Long-term repercussions and legal issues. Once the loan agreement is signed, the customer is bound to its conditions until the loan and any associated rates and fees have been paid. Typically these loans are unsecured, which means that the lender can initiate legal proceedings against the customer if they can't repay.
Government assistance schemes
The government has established a few schemes and support options for people who are receiving the pension:
- Pension Loans Scheme
This loan is for people who are of pension age but are ineligible for the Age Pension due to assets or income. This scheme allows access to capital tied up in assets to provide extra income. Fortnightly payments can add up to the maximum amount of the Age Pension.
- No Interest Loans Scheme (NILS)
This interest-free loan scheme offers loans of up to $1,200 to people on low incomes to buy essential household items, health items or to pay for car repairs in some cases. Those who are eligible must hold a pension card and be willing to repay the loan within 12 or 18 months.
- Centrelink Cash Advance
If you regularly receive pension payments you may be eligible to receive one of your payments in advance. Whether you're eligible depends on the type of payment you receive, how long you've been receiving it and the amount you receive.
Community financial assistance programs
- Saver Plus
This program helps families and low-income earners to improve their finances by developing savings plans and building assets. Savings will be matched dollar for dollar up to a limit of $500.
- Good Money
Operating out of Victoria, this community finance hub helps people access no- or low-interest personal loans, such as NILS, to purchase household goods. It also helps people to better manage their money and improve their finances.
- NAB StepUP program
This program offers low-rate personal loans for amounts between $800 and $3,000 to buy essential household items. There are no fees and charges and the interest rate is fixed.
How can pensioners apply for loans?
The table above is one starting point to find a pensioner loan. The table shows some personal loan options that are available and you can click "Go to site" to submit your application. If you have questions regarding eligibility it would be best to contact the brand directly.
Be aware that every loan application made gets listed on a credit file and too many applications within a short space of time can affect chances with a prospective lender. Contacting a bank directly via phone, online, or in branch can help determine whether they will approve a loan.
To apply, you will need to provide personal information including your name and contact details, as well as financial information regarding your pension payments, assets, debts and open credit accounts.
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