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

• Work for a year, then apply. Banks and lenders view people in casual employment as less of a risk if they have been employed at the same place for at least 12 months. This is partly because after 12 months of casual employment you have the right to ask your employer to be classed as a part-time worker. However, some lenders only require six months of steady employment to approve you for a loan.
• 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 $2,000 saved in a high interest savings account, the lender may see you as less of a risk.
• Apply with your own bank. Your own bank will have more concrete evidence of your spending and saving history than what is shown on your credit report and if this history is positive then you may be more likely to secure a loan.
• Consult an accountant. An accountant will be able to help you keep track of your tax returns, savings and spending. They'll have a record of everything so when you apply for personal loans, all the documentation is already there.
• 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. This is usually around $15,000-$20,000 p.a.
• Have you been working for at least 3 months? Many employers require you to be working at least three months as this shows your employment is stable, and in some cases, that you're out of your probation.
• 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?

If you're a casual employee or employed part-time, the following documentation will be required when applying for a personal loan:

• 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.

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

If you still aren't able to get approved for a personal loan, you do have some more options.

Short term loans

Short term loans, also known as payday loans, are an option you can consider if all else fails and you urgently need cash. However, 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. 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.

Short term loans available to casual and part-time employees

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Product AUFSL	Maximum loan amount	Term of loan	Turnaround time	Arrears fee	Costs	Fortnightly repayment (for $1,500 loan)
Fundo Small Loan	$2,000	5 to 26 weeks	Same day - conditions apply	$20	20% of loan amount + 4% of loan amount each month	$396	Borrow up to $2,000 and pay it off over 20 weeks. Same day approval for eligible borrowers.	Go to site Compare	loading Fetching your data...
Fair Go Finance Small Loan	$2,000	3 to 12 months	24 to 48 hours	$35	Establishment Fee of $60 – $400	$354	A small loan between $500 and $2,000 that can be funded in 24 hours.	Go to site Compare	loading Fetching your data...
Safe Financial Small Loan ($2000 to $5000)	$5,000	22 - 40 weeks	Same day - conditions apply	$35	Above $2,000 - $400 + loan management fee of up to $399 + from 8.7% to 48% APR	$396	Borrow from $2,000 to $5,000 with same-day funding and no early repayment fees.	Go to siteMore Info Compare	loading Fetching your data...
Credit24 Short Term Loan	$2,000	4 to 12 months	Same day - conditions apply	$10	20% of loan amount establishment fee + 4% of loan amount monthly.	$396	Credit24 offers this loan up to $2,000 and gives you 12 months to repay. Centrelink borrowers are considered as long as Centrelink payments are not more than 50% of income.	Go to site Compare	loading Fetching your data...
Credit24 Medium Term Loan (Good Credit)	$5,000	12 to 24 months	Same day	$10	$400 establishment fee + 48% p.a. interest		A small loan with long terms: Apply for up to $5,000 and have up to 2 years to repay.	Go to site Compare	loading Fetching your data...
Fair Go Finance Medium Personal Loan	$5,000	6 to 15 months	Within 24 hours	$35	Establishment fee of $400		A larger loan up to $5,000 you can apply for even with bad credit. Fast turnaround within 1 business day. Note: You must earn more than $500 per week.	Go to site Compare	loading Fetching your data...

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