Discover your borrowing power, even if you’re on a low income.
Just as people take out personal loans for a range of reasons, personal loans are available to people in a range of financial situations. Some lenders have a minimum income that you need to earn in order to apply for a specific loan, while other lenders just need you to prove that you’re able to afford the loan.
Learn how find out if you’re eligible for a personal loan based on your income with this guide.
How can I find out the minimum income required to get a personal loan?
While some lenders clearly state a minimum income requirement, other lenders do not. If there is a minimum income requirement it will be listed on the finder.com.au review page, like in this example:
If a minimum income isn’t stated, the lender will just want you to prove you can afford the loan. Jump ahead to find out how to do this>>>
What income do I need to earn to be approved for a personal loan?
|Lender||Personal Loan||Minimum income||Learn more|
|act.||Unsecured Personal Loan||No minimum||More|
|ANZ||Personal Loan||$15,000 p.a.||More|
|Bankwest||Unsecured Personal Loan||No minimum||More|
|Bank of Melbourne||Unsecured Personal Loan||No minimum||More|
|BankSA||Unsecured Personal Loan||No minimum||More|
|bcu||Unsecured Multipurpose Loan||No minimum||More|
|Bendigo Bank||Unsecured Personal Loan||No minimum||More|
|Citi||Ready Credit||$40,000 p.a.||More|
|Commonwealth Bank||Unsecured Personal Loan||No minimum||More|
|CUA||Personal Loan||No minimum||More|
|IMB||Personal Loan||No minimum||More|
|Latitude Financial||Personal Loan||$24,000 p.a.||More|
|ME Bank||Personal Loan||No minimum||More|
|NAB||Personal Loan||No minimum||More|
|RACQ||Unsecured Personal Loan||No minimum||More|
|RACV||Personal Loan||No minimum||More|
|RateSetter||Peer-to-Peer Loan||No minimum||More|
|Society One||Peer-to-Peer Loan||$30,000 p.a.||More|
|St.George||Unsecured Personal Loan||No minimum||More|
|Westpac||Unsecured Personal Loan||No minimum||More|
|Lender||Short term loan||Minimum income||Learn more|
|Cash Converters||Medium Personal Loan||$1,000 per week||More|
|Cash Train||Cash Loan||$1,200 per month||More|
|Credit24||Personal Loan||$1,000 per month||More|
|DollarsDirect||Short Term Personal Loan||No minimum||More|
|Fair Go Finance||Personal Loan||$500 per week||More|
|Ferratum||Payday Loan||No minimum||More|
|MoneyMe||Short Term Loan||No minimum||More|
|Nimble||Short Term Loan||No minimum||More|
|Sunshine Loans||Short Term Loan||$450 per week||More|
|Swoosh Finance||Personal Loan||No minimum||More|
How can I prove my borrowing power?
The first step to proving your borrowing power is working out whether you can actually afford the loan. Use a personal loan repayment calculator to work out your repayments based on the interest rate, fees, loan amount and loan term of your chosen personal loan. After you’ve done this, determine whether you’ll be able to manage the repayments on your current budget.
If you’re unsure of your borrowing power, you can use this borrowing power calculator to find out how much you might be eligible to borrow.
How do lenders determine my borrowing power?
When you submit an application for a loan, the lender will most likely ask about your expenditure. While you may have a lower expenditure than other applicants, it may not actually matter. Lenders use a formula called the Household Expenditure Method (HEM) to work out how much you’re likely to be spending based on the median spending of Australian households.
The HEM uses the number of adults and dependents in your household, the state you live in, whether you rent or own and how lavish a lifestyle lead to determine how much you’re spending. While this may not seem altogether fair, as your expenditure may actually be lower than the average, it does help banks curtail false expenditure claims.
What do I do if I’m not eligible?
There are a few things you can do if you find out you don’t meet the minimum income requirements:
- Apply for a lower amount. If you can’t prove your ability to manage repayments for your current requested loan amount, consider borrowing less. This will mean lower repayments and less of a risk for the lender.
- Choose a more affordable loan. The reason you might be ineligible for a loan could be that the loan has costs that are deemed too expensive for you. Other loans may have lower interest rates and fewer fees, which will give you a better chance of managing the repayments.
- Try your current bank. If you have a good banking history you might have a better chance of being approved for a loan with your current bank. You may be able to find products that you could be eligible for by logging into your Internet banking portal.