A guide to finding a loan when you're working part-time or casually
Working irregular hours is common in Australia. Whether you're a uni student, a parent, a shift-worker, or a role where your hours change week to week, you can still be eligible for a loan. Lenders see casual workers as more of a risk because there is no guarantee of continued work. If you work in casual or part-time employment it’s important to know that there are loan options out there to consider.
What is the difference between a part-time and casual employee?
Casual and part-time employees work across all industries, including office work, hospitality and even government work. For any industry, these employees:
|Part-time employees||Casual employees|
Casual workers: What are your loan options?
The majority of lenders require you to be in permanent/full-time employment in order to obtain finance. However, some lenders' minimum criteria just requires you to earn a regular income or requires that you meet a minimum annual income. For example, Aussie Personal Loans terms and conditions state you must be "in regular paid employment" but there is flexibility with the criteria. Take a look at some of your other options below:
Personal loans for casual employees you can compare
These are small loans that are used to cover unexpected expenses or if you need a smaller loan amount for less than one year. These loans require evidence of regular pay, but casual workers who are paid the same each week by working regular hours may still be eligible. These loans are for durations of 16 days to one year and are for amounts of $100 to $2,000, but higher amounts up to $5,000 are also available.
Warning about Borrowing
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.
How can part-time employees get approved for loans?
If you're employed part-time you will have more loan options. Here are some tips on getting your application across the line:
- Check the minimum income. As your employment is considered more stable, you will just need to ensure you meet the minimum income criteria with regards to employment requirements. This is usually around $15,000-$20,000 p.a.
- Have been working for at least three months. This will show your employment is stable.
- Receive your pay into your bank account. Along with payslips, this will be a way for lenders to check your income against the information you provide in your application.
- Get in touch with the bank if you're unsure about eligibility criteria. This is the best way to check anything before submitting your application and reduces the risk of having a rejected application listed on your credit file.
How casual employees can appear as less of a risk to lenders
Some casual workers may find it easier to access loans than others and this is because they are deemed to be less of a risk by lenders. Here are some things casual workers can do to help them access a loan:
- Work for a year, then apply. Banks and lenders view people in casual employment as less of a risk if they have been employed at the same place for at least 12 months. This is partly because after 12 months of casual employment you have the right to ask your employer to be classed as a part-time worker. Some lenders, however, only require 6 months of steady employment to approve you for a loan.
- Get a letter from your employer. Much of the risk associated with lending to casual employees is the fear that they could stop receiving work. By providing a letter from your employer that confirms your employment and ensures the lender that there's no reason this arrangement shouldn't continue in the future, it could help your application.
- Make your repayments on time. In March 2014, new credit reporting reforms were introduced to give lenders more detailed information of your credit history. Now lenders will be able to see if you have made repayments to banks and other lenders on time.
- Don’t apply for multiple loans. Lenders are able to see any credit accounts and loans that you apply for and if you make multiple applications in a short space of time you may appear to them as an irresponsible borrower.
- Save. If you can show evidence of your savings to a lender, they may be more inclined to give you a loan. For example, if you are looking to buy a car and need a $5,000 loan and have $2,000 saved in a high interest savings account, the lender may see you as less of a risk.
- Apply with your own bank. Your own bank will have more concrete evidence of your spending and saving history than is shown on your credit file and if this history is positive then you may be more likely to secure a loan.
- Consult an accountant. An accountant will be able to help you keep track of your tax returns, savings and spending. They’ll have a record of everything so when you apply for personal loans, all the documentation is already there.
If you’re a casual worker, the best way to secure a loan is by doing your research and comparing what is out there before you start applying.