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If you are a casual worker, you might be unsure whether you can qualify for finance. Getting a personal loan if you are not on a permanent contract can be challenging, but there are options available. Join us as we look into what could qualify you for a loan as a casual worker and ways to improve your chances.
Can I qualify for a personal loan as a casual worker?
If you’re a casual worker in Australia, you’re not alone – as of August 2023, there were 2.7 million casual workers in the country, equating to 22% of all employees. This type of setup differs from permanent employment in that you do not have guaranteed hours or ongoing employment and will typically not receive entitlements such as annual leave. The lack of job security can make securing a personal loan more difficult, but it is not impossible. Here are some factors that could improve your chances:
- The length of your casual employment: showing that you’ve been with your employer for at least six months or casually employed within the same industry for over a year can help your case as it demonstrates stability and reliability.
- Income consistency: even though you may work irregular hours, it’ll help if you can demonstrate working a consistent number of hours. Showing this over an extended period will give a lender more confidence that your income is fairly stable.
- A good credit score: a lender will check your credit score when you make any loan application. A good credit score can mean better terms and conditions, such as lower interest rates and higher borrowing amounts.
- Evidence of genuine savings: lenders like to see that you can budget and save money effectively. It gives them confidence that you will make your repayments.
- Your rental tenancy record: if you’re a renter, the lender can check your tenancy conduct. Making your rental payments on time can help your application.
- Offering an asset as security: putting up collateral as part of your personal loan, such as your car, will lower your lender’s risk and increase your chances of approval. However, if you default, the lender can legally repossess your asset to recoup the funds lost.
What are the other eligibility requirements for a personal loan?
Regardless of employment status, there are some general eligibility criteria that all borrowers must meet when applying for an unsecured personal loan:
- Age: you must be at least 18 years old to apply for a personal loan.
- Residency: you must be an Australian citizen or permanent resident. Some temporary visas may be accepted by some lenders, but this will not generally apply to those undertaking casual work like people on working holiday visas.
- Income: as outlined above, you need to demonstrate a stable income source, even if you're a casual worker. Lenders also set minimum income requirements, usually requiring you to earn at least $20,000 a year.
- Documentation: you'll need to provide valid identification documents, such as a driver’s licence or passport. You will also generally be required to provide proof of employment, income and address, such as recent payslips, bank statements and utility bills.
How much can I borrow as a casual worker?
In Australia, personal loans are available from $2,000 all the way up to $75,000 – but this doesn’t mean you’ll be able to get the maximum amount. When you apply, lenders assess your ability to repay the loan, considering factors like income, expenses and existing debts, as well as your employment status. It’s also important to factor in additional costs like interest and fees on the loan. To help you get a better deal, before applying for a loan, you should:
- Find out your credit score: you can find out your credit score for free from credit reporting agencies like Experian, Equifax and illion. If you need to improve it, start paying all your bills on time before you apply for your personal finance.
- Look at the comparison rate: this includes the interest rate plus the cost of any lender fees and charges. If you have a choice between different loans, choose the one with the lowest comparison rate to save money.
- Use a loan calculator to work out affordability: you can use a repayment calculator to find out your repayments for different borrowing amounts, terms interest rates and repayment frequencies.
- Think carefully about your term: personal loan terms in Australia usually range from one to seven years. Shorter loan repayment periods can save you money in the long term, but keep in mind this will mean higher monthly repayments.
- Compare lenders: different lenders have different policies for determining loan amounts, so it’s important to compare your options to find a loan that best suits your circumstances.
More of your questions about personal loans for casual workers
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Written by Fact checked
This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
