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.
Personal loans for part-time and casual employees
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|
How can you get approved for a loan if you don't work full time?
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? Many employers require you to be working at least three months as this shows your employment is stable, and in some cases, that you're out of your probation.
- 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. If you are paid in cash, make sure you deposit this into your bank account or get payslips from your employer to be able to prove your income.
- 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.
Tips to get approved for a loan if you work casually
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 what is shown on your credit report 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.
What criteria do you need to meet to be approved for a personal loan?
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:
What do you do if you can't get a personal loan?
If you are in need of a loan to cover a short-term cash shortfall and you don't meet the criteria for a standard personal loan, a short-term loan is another option you can consider. It's important to keep in mind, however, that short-term loans are much more expensive than personal loans from banks and have to be repaid over much shorter terms.
Short-term loans 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.