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Personal loans & eligibility: Your top questions answered

We get it. Personal loan eligibility criteria aren't always so clear cut. So, before you even consider applying for a personal loan, it's super important to shop around and compare your options until you find the right loan for you.

By doing your research, you can determine whether you meet any eligibility requirements before applying - and that way, hopefully, avoid rejection. Not to mention that nasty strike on your credit report that follows.

Personal loan comparison: This is where Mozo’s personal loan comparison tool is your best friend, as it lets you compare loads of different personal loan products across the market based on your desired loan term and amount, so you can find a loan that best suits your budget. We also offer a range of personal loan calculator tools to help you compare and contrast different options.

So, to help make applying for a personal loan a little easier to navigate, we’ve gone and answered a bunch of your most-asked personal loan questions, so you can focus on the more important stuff, like whatever it is you need a personal loan for in the first place.

Does my credit score affect my eligibility for a personal loan?

Okay, now before we get into all the nitty-gritty personal loan eligibility requirements for a range of different employment and financial circumstances...

First, let's take a look at the one factor that impacts all potential borrowers' chances of being approved for a loan - your credit score.

Can I get a personal loan with a bad credit history?

The shape of your credit report can either make or break your chances of being approved for a personal loan. A poor credit history of bad debt, late repayments or defaults could lead to your loan application being rejected, as the lender will question your ability to meet loan repayments.

However, it is possible to get a personal loan with bad credit. You may just have to accept a higher interest rate or more restrictive conditions.

Can I get a personal loan with no credit history?

By the same token, if you've never had a credit card, car loan or any other line of credit - and thus, haven't yet established any credit history, this could also make getting approved for a loan difficult as the lender has nothing to determine your credit-worthiness.

Tip: Each time you apply for a loan, the lender must run a hard enquiry (a credit check) to assess your eligibility for the loan, which is recorded on your credit report.

Having too many hard enquiries made within a short period can raise a red flag to the lender and potentially jeopardise your chances of being approved for a loan. This is another reason why it's imperative to shop around and make sure you're eligible for a loan before applying.

  • Mozo’s Rate Matcher tool: runs a quick credit check, then pulls tailored search results to help you find personal loans that you're most likely to be eligible for.

Can I get a personal loan on the Pension?

Potentially. Getting approved for a personal loan as a retiree on the Pension can be tough as you need to show the lender you'll be able to keep up with regular loan repayments.

This can be hard to prove without a regular income - but with some solid savings up your sleeve, you'll be in a better position to do so.

If your chances of being approved for a personal loan are slim, here are some of the alternate options available to pensioners looking to borrow money:

Reverse mortgage:

If you’re strapped for cash but own property, then one option is to apply for a reverse mortgage. A reverse mortgage lets Aussies over the age of 60 convert their property equity into cash. The good news is you don’t need an income to qualify, but watch out for any fees or interest charges.

Government Assistance:

Here are some of the government assistance schemes available to pensioners needing extra funds:

  • Pensioner Loans Scheme: If you’re of the legal retirement age but aren’t eligible for the Pension because you own expensive assets or earn an income, then this scheme could provide you with additional funds by giving you access to capital tied up in assets.
  • Advance Pension payment: If you're on the Pension and need some extra cash, then you could potentially apply for an advance interest-free payment of 1-3 week's pension payments. This will need to be repaid within 6 months.
  • No Interest Loans Scheme (NILS): This is an interest-free loan of up to $1,200, which you could be eligible to receive if you hold a Government Centrelink Pension card.

Be sure to check out our guide for more information on borrowing money as a pensioner.

It can be difficult, but it's possible. As long as you meet any eligibility criteria and your Centrelink payments aren't your main income source - then you could potentially be approved for a personal loan whilst receiving Centrelink payments. 

It all depends on whether you can prove to the lender that you'll be able to meet regular repayments and ultimately pay off the loan. But keep in mind, some lenders will not lend to people who receive Centrelink benefits.

  • If you a low-income earner who's eligible to receive Centrelink benefits, then your current financial position mightn't allow you to commit to paying off a personal loan.
  • Legally, lenders must adhere to responsible lending conduct obligations. So, granting you a loan that you can't afford to repay in the first place would be irresponsible lending.

Be aware that taking out a personal loan could potentially disqualify you from receiving Centrelink payments. So, whether or not you should take out a personal loan (or would even qualify for one) all depends on your own individual financial circumstances.

Make sure to read our guide on low income personal loans.

Can I get a personal loan if I am a student?

Yes. If you're a full-time uni student after some extra cash for a big upcoming expense, or to help get you through the next few years without a stable income, then you might consider taking out a student personal loan.

The bills certainly start piling up when you're in uni, from textbooks and living expenses to social events. So, unless you have a part-time job or are still a customer with the bank of mum and dad, then it's not uncommon for a student to opt for a personal loan.

Can I take out a personal loan if I’m unemployed?

Maybe! A more flexible lender might grant you a personal loan if you're unemployed, so long as you prove you can meet regular loan repayments. The lender will usually assess this based on whether you meet the following criteria:

  • You have some form of regular income: Even without a current job, you'll still need to have some form of steady income to prove that you can stay on top of loan repayments.
  • Your credit report is in tip-top shape: With comprehensive credit reporting, lenders now have a fuller view of your credit history (i.e. both the good and the bad). So, you'll want your credit report to have no negative strikes and a solid history of paying your bills on time.

Can I get a personal loan if I’m self-employed?

When it comes to personal loans and self-employment, unfortunately, the two don’t always mix. To be approved for a loan, the lender wants to be sure you can meet regular loan repayments.

As a business owner, while you may be able to afford a loan, you mightn't get approved for one due to the unpredictability of self-employment. 

A lender is more likely to lend to someone who works for a company and earns a regular income, like a weekly wage, as they're less of a risk.

So, if self-employment is getting in the way of you being approved for a personal loan, here are some other options:

  • Specialist lender: If you can't get approved for a traditional loan, then there are specialist lenders out there that offer loans specifically for self-employed borrowers.
  • Low doc loan: Alternatively, self-employed borrowers who are ineligible for a standard personal loan might go for a low doc loan instead. A low doc loan requires less documentation than a traditional personal loan, but watch out for higher interest rates and fees.

For more top tips, go check out our personal loan guides and articles. To compare loans, see our loans hub for home loans, car loans as well as personal loan options. Use a personal loan calculator to help find a great option for you.

Compare Personal Loans - last updated 19 April 2024

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Unsecured Personal Loan


    interest rate
    comparison rate
    Monthly repayment
    6.75% 26.95% p.a.
    6.75% 26.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Multi-year winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021, 2022, 2023 & 2024^'

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  • Unsecured Personal Loan


    interest rate
    comparison rate
    Monthly repayment
    5.76% 24.03% p.a.
    6.55% 24.98% p.a.based on $30,000
    over 5 years

    Fast, easy and 100% online, this is a low cost loan with no ongoing fees or extra repayment penalties. It's perfect for savvy borrowers with great credit. If you’re over 18 and earn above $30,000, you could qualify (other eligibility criteria may apply).

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  • Express Personal Loan


    interest rate
    comparison rate
    Monthly repayment
    14.95% 27.95% p.a.
    29.30% 42.8% p.a.based on $10,000
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Rhianna Dews
Rhianna Dews
Senior Money Writer

Rhianna has a Master of Journalism and Communication from UNSW, and has contributed to several consumer publications including TechRadar, Simply Living Australia, Beauty News Australia, Beauty World News and Fashion Gone Rogue. With over eight years of experience helping consumers make the most of their money, and a background in creating content for brands including Foxtel and Vodafone, means she's always the first to know the latest consumer trends. Her focus is on millennial money motivation and helping Aussies make smart money moves in personal loans, credit cards and online shopping.

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

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