Loans for casual and part-time workers

What's the difference between a part-time and casual employee?

Tips to get approved for a loan if you work casually

• Build up your work history first. The longer you've been in a steady casual role, the less risky you look to lenders. Under current Fair Work rules, you can request conversion to permanent part-time after 6 months (12 months for small business employers), which can also strengthen your application. Some lenders approve casual borrowers with as little as 6 months of steady employment, so check individual lender criteria rather than assuming you need a full year.
• 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. Lenders are able to see a snapshot of your credit history, so make sure that snapshot shows off you regularly meeting your bill and debt repayments. This has the added effect of improving your credit score.
• 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 $3,000 saved in a high interest savings account, the lender may see you as less of a risk.
• Improve your credit score. The higher your score, the lower risk you are to the lender.
• Provide loan security. If you own an asset of value, such as your home or a vehicle, offering this as loan security could help you to get approved more easily and/or allow you to access a lower rate loan. Offering security reduces the risk to the lender. This is because they can repossess the asset should you default on the loan.

Tips to get approved for a loan if you work part-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. Most lenders on this page want $25,000 to $36,000 a year, so check each product's eligibility note.
• 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.

What documents do I need for a loan for casual workers?

• ID, which may include a drivers license or passport
• Details of and proof of address
• Proof of employment (you may also be required to have been in your current role for 3, 6 or 12 months)
• Proof of income, such as 2 consecutive payslips and/or 90 days of bank statements

Additional documents you may need to provide, or that may help you get approved:

• A letter from your employer
• Details of your guarantor
• Details of loan security (e.g. a vehicle or other asset of value)

Lenders are looking at these documents to verify who you are and decide how risky it is to lend to you. If they see your bank statements show signs of paying bills on time and saving money, then you could have better chances of approval or even lower rates.

How long do you need to be in a job for a personal loan?

Have you been working for at least three months? Many employers are comfortable approving your loan as long as you have been working at least three months, as this shows your employment is stable, and in most cases, that you're out of your probation.

Our expert says

"Knowing your credit score is really important, as it's one of the key things lenders look at when assessing your loan application. It can also help you get ahead with your finances: Finder's data shows 15% of people who know their credit score, say they are now better at paying their bills on time and in full. You can see your credit score for free and get monthly updates on any changes in the Finder app."

Sarah Megginson

Money expert + media spokesperson

What are my options if I can't get a personal loan as a casual or part-time employee?

0% interest loans

See if you're eligible for a no interest loan with Good Shepherd. There's certain criteria you need to meet, but if you're eligible, you can access up to $2,000 for essential goods and services such as car repairs, dental costs and household items, or up to $3,000 for a rental bond or disaster recovery.

Short term loans

Short term loans, also known as payday loans, are an option if all else fails and you urgently need cash. It's important to keep in mind that short term loans are much more expensive than personal loans from normal lenders and have to be repaid over much shorter terms. They still have eligibility criteria you should try to match, but tend to be much less strict on it.

These loans are for durations of 16 days to 1 year and are for amounts of $100 to $2,000, but higher amounts up to $5,000 are also available. Interest rates on short-term loans can be as high as 48% per year, so be very careful with these loans, as regularly using them will cost you a lot of money.

Guarantor loans

Guarantor loans are where you include someone who is legally responsible for meeting your repayments should you default on the loan. Usually, guarantors are required to be homeowners with good or excellent credit scores.

So, if you have a friend or close family member who meets this eligibility and is willing to go guarantor on your behalf, it may improve your chances of having your personal loan application accepted. It may also help you to access a greater amount of funding than your salary would normally allow, but be aware that your guarantor's credit score may suffer if you fail to meet your repayments.

Joint application loans

Joint application personal loans allow you to apply with another person, usually your partner. This spreads the responsibility for your repayments across two people, making it less risky for the lender.

• 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.