Apprentice loans

What personal loan options do I have as an apprentice?

If you're an Australian apprentice and you need a loan you have 2 very different options:

1. Take out a personal loan.
2. Get a Trade Support Loan (TSL) from the government.

TSLs have some obvious advantages: you receive a monthly payment and you won't get charged interest. You don't have to pay the loan back until you start earning above the income threshold (although your debt is adjusted for inflation each year).

But you might not meet the eligibility requirements, or need a larger lump sum. In this case you could look at a personal loan. You'll be charged interest and fees and you'll have to start repaying the loan right away.

Can I take out a loan as an apprentice?

Apprentices can take out loans to cover almost anything, from training costs or work equipment to daily living expenses.

It can be hard to get a personal loan approved as an apprentice because your income is likely low, especially during the early years of your training. And you may not have an established credit history yet.

If you want a TSL you'll need to be studying a Certificate II, III or IV level qualification in an eligible subject.

How do Trade Support Loans work?

Apprentices can borrow up to $24,492 in total with a TSL over the 4 years of an apprenticeship. Eligible apprentices receive a monthly payment, with payments being higher in the first year and shrinking each year as your wages rise.

Monthly TSL payment schedule (2023–24)

Eligibility

To qualify for a TSL you need to be:

• Undertaking a qualifying apprenticeship.
• An Australian resident with a tax file number.

A qualifying apprenticeship means you're undertaking one of the following qualifications:

• A Certificate III or IV in an occupation on the Trade Support Loans Priority list.
• A Certificate II, III or IV in an agricultural qualification on the Trade Support Loans Priority list.
• A Certificate II, III or IV in a horticulture qualification on the Trade Support Loans Priority list in specified rural or regional area.

Repaying your Trade Support Loan

Much like a university HECS-HELP loan, apprentices don't have to repay their TSL debt until they earn above the minimum income threshold. The threshold for 2023–24 is $51,550 a year.

Once you start earning this much you will have compulsory repayments taken from your monthly earnings.

TSL debts are interest-free but are indexed once a year according to the CPI. This means your debt will rise in line with inflation.

How do personal loans for apprentices work?

An apprentice can apply for a personal loan just like any other borrower. You could take out a personal loan to cover tools or equipment, or get a car loan to buy a vehicle so you can get to your job.

Personal loans: The basics

With any personal loan you borrow a sum of money and then pay it back over time. You repay the debt monthly, weekly or fortnightly and your lender charges you interest. You may also have to pay an upfront loan fee and a monthly account fee.

The amount you can borrow depends on:

• Your age. You generally need to be 18 to get a personal loan. If you're an apprentice under 18 you won't be able to get a loan approved (but you might still be able to get a TSL).
• Your income. Lenders assess your borrowing capacity based on your income. Since apprentices earn less than most workers, especially early on, it will be hard to qualify for a large loan.
• Your credit score. Having a good or excellent credit score helps you get a loan application approved and can unlock lower interest rates. You can check your credit score for free with Finder.
• Your saving and spending habits. If you've saved a bit of money and spend less than you earn, you look like a more reliable borrower in a lender's eyes.

Should I take out an apprentice loan or a Trade Support Loan?

Deciding between a personal loan and a TSL depends on your circumstances and financial needs. We've broken down the pros and cons of both to help you decide.

TSLs

Personal loans

Others forms of government financial support for apprentices

Living Away From Home Allowance

Australian apprentices who are required to move away from their family home for the first time can receive a Living Away From Home Allowance.

Eligible apprentices receive a weekly payment for up to 3 years, with the payment amount declining each year.

Australian Apprentice Training Support Payment

Eligible Australian apprentices can get up to $5,000 of financial assistance, paid out in 6-month instalments over 2 years. Payments are designed to help apprentices cover their living expenses.

To qualify for Australian Apprentice Training Support Payments you need to be studying a Certificate III level qualification or above in an occupation listed on the Australian Apprenticeships Priority List.

This payment is considered part of your taxable income.

Youth Allowance, Austudy and ABSTUDY

• Youth Allowance. Apprentices aged between 16 and 24 may be eligible for Youth Allowance. Income and asset tests determine your eligibility.
• Austudy. Apprentices aged 25 and over may be eligible for Austudy. Income and asset tests determine your eligibility.
• ABSTUDY. ABSTUDY is also available for apprentices of any age who are Indigenous Australians. The amount that you're eligible for may vary.

How do I compare personal loans for apprentices?

Lenders don't offer specific personal loans for apprentices. Instead you simply apply for a personal loan that looks suitable and the lender looks at your income, spending and credit score when assessing your application.

If you've decided to get a personal loan rather than a TSL, for whatever reason, it's important to compare loans from a range of lenders.

Here are some tips:

1. Pay attention to the interest rate. The lower your interest rate, the lower your interest charges are. It's the most important factor when comparing personal loans.
2. Watch out for loan fees. Some personal loans come with hefty fees, especially if the lender charges the application fee as a percentage of the total loan amount. Make sure you add up the monthly fees as well.
3. Check your credit score before you apply. You can check your credit score for free and see if there are any obvious issues dragging your credit score down. This could be an unpaid debt or a mistake on your file, which you can get fixed.
4. Check the eligibility criteria before you apply. Don't waste time applying for a loan if you don't meet the eligibility criteria first. A rejected application also hurts your credit score.

Frequently asked questions

• How much do apprentices get paid in Australia?

  Every apprentice's salary is covered under the appropriate award for the role and industry. This covers base pay, overtime, penalty rates, leave, allowances, superannuation and more.

  If you don't know your award or want more details about it, you can use the Fair Work Ombudsman's Pay Calculator to find it.

• How do I pay back my apprenticeship loan?

  Once you complete your apprenticeship and start earning above the income threshold, your employer will withhold some of your monthly income to cover your TSL repayments. This increases the more you earn.

  You need to notify your employer that you have a TSL debt.

  If you take out a personal loan you'll start making repayments weekly, fortnightly or monthly as soon as the loan begins. Most lenders let you make repayments online or set up automatic payments from your bank account.

• Can apprentices get loans?

  Yes. Apprentices can get both specific government loans, such as the Trade Support Loan, or take out personal loans with private lenders.

• Are apprentices eligible for Centrelink?

  Yes. Apprentices can get Youth Allowance or Austudy payments if they are undertaking an apprenticeship and meet other criteria related to your income (or your parents' income if you live at home).

Why compare personal loans with Finder?

Addicted to details. We know taking out a personal loan is something you'll be hooked up with for a while. That's why we put hours into research for this guide (and still do at least once a month)

Rates obsessed. Lenders come in all shapes and sizes, that's why we don't just track the big banks, but all the digi folk too. Pretty much everyone but your parents to be honest.

Cash for whatever you need. Lending rates verified from 180+ products day and night. Whether you're buying a car, rennovating your home or heck just ready to let loose with the spending - we got you.

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Richard Whitten

Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

Richard's expertise

Richard has written 562 Finder guides across topics including:

• Home loans
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