This article will enlighten you on how loans for unemployed workers in Australia, the requirement to get the loans, how to borrow money while unemployed, and the 5 best hardship loans for the unemployed in Australia.
Not having a job can be very challenging, especially when facing a financial emergency that requires cash. Being unemployed doesn’t stop a person from getting a loan. There are always lenders out there to give you the financial assistance you want.
- You will learn how loans for unemployed workers in Australia,
- The requirement to get a loan for unemployed people
- The best hardship loans for the unemployed, along with some frequently asked questions on loans for unemployed people.
How Loans for Unemployed Work in Australia
Evaluating a borrower’s employment status and running a credit check are prerequisites for every lender before sanctioning a loan.
But does that imply that those who find themselves without a good job or no job are ineligible to borrow? Fortunately, most lenders offer financial hardship loans for unemployed people in Australia, and people can easily apply for them.
To apply for a personal loan when unemployed, an individual must visit the lender’s website to fill out the online application form or call the lender directly. To be eligible, an individual must be:
The person must be 18 years and above
The person must be an Australian citizen or permanent resident
- Proof of Identification (ID)
- Details of loan security, either a vehicle or other asset of value
- Details and proof of address
- Information regarding the person’s guarantor
Requirements to get a loan for the unemployed in Australia
The specific eligibility criteria are different among lenders, but lenders will consider the following when a person applies:
Financial situation/credit history
When assessing a borrower’s application, lenders consider credit score, credit history, and financial situation. For example, an individual who is repaying other short-term loans, currently under a Part 9 Debt Agreement or in bankruptcy, may not be approved. Ensure to check the lender’s eligibility criteria before applying.
Ability to repay a loan
When lenders review applicants, they consider whether or not an applicant can afford to manage repayments. If an unemployed person is looking to borrow a small amount and the person’s income and expenses prove that they can handle the ongoing repayments, they might qualify.
However, suppose the person is looking to borrow a huge amount of money that will be difficult for them to repay, considering their current situation. In that case, they are less likely to get approved.
If an individual owns assets such as a car or has equity in a property, the application will have a greater chance of being approved. The fact is the lender will use this as security for the loan.
Some lenders approve applicants who are receiving eligible government payments. People receiving specific Centrelink allowances, such as parenting payments or a pension, may be able to include this as a percentage (%) of their eligible income.
A person may only be approved if no more than 50 per cent of their income comes from Centrelink payments.
How to Borrow money while unemployed in Australia
Below are ways how to borrow money when unemployed in Australia.
1. Individuals should find an alternative source of income.
2. Get a co-signer.
3. Provide the needed document/collateral.
4. Lower debt-to-income ratio.
5. Increase credit score.
6. Use a home equity loan.
5 Best Hardship Loans for Unemployed in Australia
Below is a list of the 5 best hardships loans for the unemployed in Australia
Secured personal loans
Personal loans are unsecured, but secured loans may be an option for people who wouldn’t qualify for a loan. An asset or money can secure personal loans in a savings account or CD.
It can be easier for people to qualify for a secured personal loan but keep in mind that the lender may seize their collateral if they don’t repay.
Bad credit loans
Unsecured loans usually don’t require collateral, and lenders determine the interest rate and eligibility based on financial profiles, including borrowers’ credit scores. However, some lenders extend their offerings to borrowers with subprime credit.
Credit union personal loans
Unlike online lenders and traditional banks, credit unions are not-for-profit, member-owned financial institutions. Credit unions are more willing to extend their loan offerings to their long-standing members, even if the members have subprime credit.
Joint / cosigned personal loans
People with subprime credit who have a family member or a spouse with strong credit could consider opening a joint loan. It may be easier for the person to qualify for a personal loan and to qualify at a lower APR if the person enlists the help of a co-borrower.
Cash advance application
People can sign up for an application offering free or low-cost cash advances. Cash advance applications can help people access between $200 – $500. It is generally interest-free but costs between $2 – $14.
Being unemployed is challenging, and not getting approved for loans can only add to your ordeal. In such cases, loans not granted based on a person’s employment status are a boon.
However, it is easy to borrow too many loans and fall into a debt trap. Missing repayments can impact credit scores and make it harder to get other loans once they are employed. Assessing your financial situation before applying and keeping a close watch on your credit history is more advisable.
How can I get a loan if I do not work?
People can qualify for a loan when they are unemployed, but they will need solid credit and other sources of income. Whether a person is unemployed unexpectedly or by choice (retirement), most lenders will consider extending the person a loan as long as they can persuade them they can make regular payments on time.
How do I get a $1000 loan from Centrelink?
Yes, it is possible
Can I get a loan without a bank statement?
Indeed, people can get loans without bank statements, which is considered an increased risk level and comes with higher interest rates.
Can I get an equity loan without a job?
People can get a home equity loan with no income. Home equity lenders primarily evaluate the application based on the home’s value.
Can I borrow $5000 from Centrelink?
Lenders may be able to offer 3 types of loans for people on Centrelink: A small loan (unsecured) of $300 – $2,000 for the easy financial loans term. A medium loan (secured), $2,001 – $4,600 for the loan term. A large loan (secured) $5,000 – $10,000 for the loan term.
How do I get a $250 Centrelink payment?
To get the $250 one-off Cost of Living Payment, the person must be a Department of Veterans’Affairs customer or Centrelink customer.
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