If you’re receiving a government pension or benefits, you may find it harder to qualify for a personal loan – but there are lenders out there that are willing to work with you if you need finance. These lenders may accept certain fixed benefits as part of your income, such as:

Age Pension
Disability Support Pension
Carer Payment
Parenting Payment
Service Pension
Family Tax Benefits A and B

However, be aware that other Centrelink benefits and payments such as Youth Allowance, Austudy or JobSeeker payments are typically not accepted. JobSeeker may be accepted as a low income supplement, however.

What other eligibility requirements will I need to meet for a personal loan?

All borrowers need to meet certain eligibility requirements to qualify for a personal loan, including:

Age and residency: you must be at least 18 years old to apply for a loan in Australia. There's no maximum age, meaning that, as long as you can afford it, you could be approved as a senior over the age of 65. You’ll also need to be an Australian citizen or permanent resident.
Income: all lenders will have minimum income requirements for borrowers – though this can be as low as $20,000 per year. Many lenders will also consider income from other sources outside traditional employment, so as well as government benefits, money earned from ventures such as investment properties and self-employed income may also be considered.
Expenses: lenders also look at your monthly expenses to evaluate whether you can comfortably make loan repayments. This includes housing costs, utilities, groceries and any other financial commitments.
Credit history: while you can apply for a loan with bad credit, a good credit score significantly improves your chances of getting approved. Lenders will run a credit check to assess how you’ve handled credit in the past, whether you’ve made timely payments and how much debt you currently have.

You may also find that the amount you can borrow is capped below the lender’s maximum limit. Lenders in Australia must adhere to responsible lending regulations, which require them to assess whether you can repay the loan without facing financial hardship. This process helps protect both you and the lender by ensuring the loan is affordable for your circumstances.

How can I improve my chances of approval?

When applying for a personal loan, meeting the lender’s criteria is key. Whether you depend on Centrelink benefits or have alternative income sources, there are several ways to improve your chances of being approved:

Check your credit score: before applying for a loan, it’s essential to check your credit score. If your score is lower than you'd like, you can take steps to improve it, such as paying off existing debts, making timely bill payments and limiting new credit applications.
Apply for an affordable amount: borrowing only what you need and ensuring the amount is reasonable for your income level can improve your chances of approval. A smaller loan is more manageable for pensioners, especially with limited fixed incomes.
Offer security: taking out a secured loan by offering an asset like a car as collateral can make you more attractive to lenders, as it reduces their risk, and may allow you to borrow a larger amount.
Use a guarantor: having a family member or close friend act as a guarantor can increase your chances of loan approval. This person’s income and credit score can help strengthen your application and potentially secure better terms.
Compare lenders: not all lenders are the same when it comes to offering loans to pensioners. At Savvy, we simplify the process by comparing a range of lenders in one place, helping you find the best option available for your needs and circumstances.

What alternative loan options are available to me as a pensioner?

If a personal loan isn’t currently an option for you, there are alternatives you could turn to if you need access to funds:

Centrelink Advance Payment: this allows eligible Centrelink recipients to access a portion of their future benefits as a lump sum, which is then repaid gradually through reduced future payments.
No Interest Loan Scheme (NILS): managed by community organisations, NILS offers those on low incomes loans up to $2,000 for essential items like appliances or medical expenses, and up to $3,000 for housing-related expenses, with no interest or fees attached.
Home Equity Access Scheme: this government scheme allows Australian homeowners aged 67 and above to use their property as equity for a loan in order to supplement their income. This can be a low-risk option for those who are asset-rich but cash-poor.