What is the minimum income for a personal loan?

Personal loans are available to people in a range of financial situations. To make sure the loan is suitable, lenders set certain requirements that borrowers need to meet to be eligible to apply for the loan. One of these is a minimum income requirement. This is one way of proving you're able to afford the loan.

Some lenders will need you to earn over $30,000 p.a. to be eligible, while others only need you to be making over $300 per week. There are also lenders that don't have a minimum income requirement, although these loans are usually more expensive.

What income do I need to earn to be approved for a personal loan?

• Personal loans
• Short term loans

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What if the lender has no minimum income requirement?

If the lender has no minimum income requirement then it will rely on its own methods to determine whether or not you can afford the loan. The lender will do its due diligence by asking for your bank statements and/or an estimate of your expenses and other commitments, such as credit card limits and loans, to see if you will be able to afford the repayments.

If you have concerns about whether or not you will be approved, you might want to contact the lender to get some more information.

How do lenders determine how much I can borrow?

When you submit an application for a loan, the lender will most likely ask about your expenditure. You should try to be as accurate as possible when estimating your expenses as the lender may check your bank statements. Lenders also use a formula called the Household Expenditure Method (HEM) to work out how much you’re likely to be spending based on the median spending of Australian households.

The HEM uses the number of adults and dependents in your household, the state you live in, whether you rent or own and how lavish a lifestyle you lead to determine how much you’re spending. While this may not seem altogether fair, as your expenditure may actually be lower than the average, it does help banks curtail false expenditure claims.

How can I prove my borrowing power?

The first step to proving your borrowing power is working out whether you can actually afford the loan. Use a personal loan repayment calculator to work out your repayments based on the interest rate, fees, loan amount and loan term of your chosen personal loan. After you’ve done this, determine whether you’ll be able to manage the repayments on your current budget.

If you’re unsure of your borrowing power, you can use this borrowing power calculator to find out how much you might be eligible to borrow.

What do I do if I’m not eligible?

There are a few things you can do if you find out you don’t meet the minimum income requirements:

• Apply for a lower amount. If you can’t prove your ability to manage repayments for your current requested loan amount, consider borrowing less. This will mean lower repayments and less of a risk for the lender.
• Choose a more affordable loan. The reason you might be ineligible for a loan could be that the loan has costs that are deemed too expensive for you. Other loans may have lower interest rates and fewer fees, which will give you a better chance of managing the repayments.
• Try your current bank. If you have a good banking history you might have a better chance of being approved for a loan with your current bank. You may be able to find products that you could be eligible for by logging into your Internet banking portal.

Frequently asked questions

• Can you borrow money on low income?

  You may be able to borrow money when you're earning a low income, but your options may be more limited than if you had a higher income stream to support the loan repayments. Lenders may offer smaller loan amounts and charge higher interest rates. Consider looking for lenders who specialise in loans for low-income earners or government assistance programs.

• What is the lowest you can get on a personal loan?

  Many lenders offer personal loans starting from $1,000 to $5,000 as the minimum loan amount. However, smaller loans might come with higher interest rates, so it's important to compare loan options.

• Is it hard to get a $10,000 personal loan?

  Getting a $10,000 personal loan is not necessarily hard, but it depends on factors like your income, credit score and debt levels. Lenders will assess your ability to repay before approving the loan. A stable income and good credit score will improve your chances.

• How long do you need to be employed to get a loan?

  Lenders generally prefer applicants who have been employed for at least 3 to 6 months, but the exact time can vary. Some lenders may be more flexible, especially if you have a strong credit history or other sources of income.

• Can I get a personal loan on casual employment?

  You can get a personal loan while earning an income through casual employment, though it may be more difficult than it would be with a full-time job, as that is considered less risky. Lenders will look at your overall income stability, including casual wages and other income sources. You may need to provide proof of consistent earnings.

Why compare personal loans with Finder?

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Written by

Elizabeth Barry

Journalist

Elizabeth Barry is an experienced journalist with over 10 years of expertise in personal finance, contributing to outlets like the ABC, Sydney Morning Herald, and 7News. She holds a Master of Arts in Creative Writing and a Bachelor of Arts in Communication from the University of Technology Sydney, and has earned multiple award nominations, including a Highly Commended recognition at the 2017 Lizzies. Elizabeth began her career at Finder in 2013, progressing through roles to become Lead Editor, where she oversaw a wide range of personal finance coverage until 2024. See full bio

Elizabeth's expertise

Elizabeth has written 210 Finder guides across topics including:

• Banking
• Personal finance
• Investing