Personal loans are available to people in a range of financial situations. To make sure the loan is suitable, lenders set certain requirements that borrowers need to meet to be eligible to apply for the loan. One of these is a minimum income requirement. This is one way of proving you're able to afford the loan.
Some lenders will need you to earn over $30,000 p.a. to be eligible, while others only need you to be making over $300 per week. There are also lenders that don't have a minimum income requirement, although these loans are usually more expensive.
What income do I need to earn to be approved for a personal loan?
Use Finder to compare personal loans to make sure you're getting the better deal. Remember to check the eligibility criteria!
Finder survey: How many Australians of different ages have used a buy now pay later service?
Response
75+ yrs
65-74 yrs
55-64 yrs
45-54 yrs
35-44 yrs
25-34 yrs
18-24 yrs
No
85.11%
71.52%
59.24%
47.02%
34.78%
32.11%
41.9%
Afterpay
6.38%
19.39%
28.66%
34.52%
48.37%
55.26%
43.81%
PayPal Pay in 4
6.38%
11.52%
10.83%
19.64%
26.09%
22.63%
10.48%
Zip
4.26%
3.03%
12.1%
16.67%
26.09%
25.26%
20.95%
Other
2.13%
2.42%
3.18%
2.38%
2.72%
2.11%
3.81%
Humm
3.64%
3.82%
5.36%
5.98%
5.79%
5.71%
Klarna
1.82%
4.76%
5.98%
6.32%
5.71%
Openpay
1.21%
1.91%
4.17%
8.7%
6.32%
2.86%
Bundll
1.19%
1.58%
Source: Finder survey by Pure Profile of 1016 Australians, December 2023
What if the lender has no minimum income requirement?
If the lender has no minimum income requirement then it will rely on its own methods to determine whether or not you can afford the loan. The lender will do its due diligence by asking for your bank statements and/or an estimate of your expenses and other commitments, such as credit card limits and loans, to see if you will be able to afford the repayments.
If you have concerns about whether or not you will be approved, you might want to contact the lender to get some more information.
How do lenders determine how much I can borrow?
When you submit an application for a loan, the lender will most likely ask about your expenditure. You should try to be as accurate as possible when estimating your expenses as the lender may check your bank statements. Lenders also 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 you 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.
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.
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.
Why compare personal loans with Finder?
We're free
Our personal loan comparison is completely free to use. There are no costs at all for you to use our database to find a better deal. Better still, we regularly run exclusive deals that you won't find on any other site.
We're experts
We've researched and reviewed hundreds of loans as part of our Finder Awards. Our database and tables are always up-to-date and our in-house experts regularly appear on Sunrise, 7News and SBS News.
We're independent
We are independently owned and have a mission to help Australians make better financial decisions. That means our opinions are our own and you can compare nearly every personal loan in Australia (and find a better deal).
We're here to help
Since 2014, we've helped 300,000+ people find a personal loan by explaining your options simply. You don't need to give us any details to use our comparison. We're here to help you make a decision.
Elizabeth Barry is the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review.
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Your ability to borrow money would depend on how your chosen lender would assess your creditworthiness. If you meet their eligibility requirements, there’s a higher chance you’ll get approved. You can use our calculator to get an idea how of much you can borrow. You can also read more about how to increase your chance of getting approved for a personal loan.
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I earn $565 per week. Am I able to borrow $5000?
Hi Warren,
Thanks for reaching out to us.
Your ability to borrow money would depend on how your chosen lender would assess your creditworthiness. If you meet their eligibility requirements, there’s a higher chance you’ll get approved. You can use our calculator to get an idea how of much you can borrow. You can also read more about how to increase your chance of getting approved for a personal loan.
I hope this helps.
Cheers,
Rench