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23.1.2014
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The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%
*Warning: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different rate.
Viva Payday Loans > Payday Loans > Unemployed Loans

Unemployed Loans

Instant Cash Loans No Credit Check Unemployed

There are many reasons why an unemployed individual might seek out a loan. Most commonly, unemployed loans are sought to pay for home improvements, holidays, weddings, debts, car repairs and maintenance, among other reasons.

It is presumed that only those with employment are eligible to secure a loan. However, this is incorrect, as there are many lenders in Australia that offer loans to unemployed individuals as well, although they, too, require borrowers to have some form of income, such as income derived from government benefits plans or through income-generating assets.

Some common forms of income that many lenders accept in the case of unemployed applicants include payments received from Centrelink, earnings made by self-employed individuals, dividends earned on shareholdings, or similar sources.

In all cases, lenders providing unemployed loans would likely require applicants to provide extensive financial details including bank account statements and wealth statements in order to assess the borrower’s affordability for the loan.

How Much Does An Unemployed Loan Cost?

Since the risk factor of giving out loans to the unemployed is higher for lenders, as a result they do charge a comparison rate that is higher compared to most other loan options. Lenders are charging either a fixed one-time 20% establishment fee in addition to a fixed monthly fee of 4%, or charging variable rates on the loans, mostly above 45%. Most lenders are providing loans to the unemployed between the $50-$5,000 limit.

What is the eligibility criteria to apply for unemployed loans?

Although every lender would have its own eligibility criteria, generally lenders require the following conditions to be met. Borrowers must:

  • Prove ability to make timely repayments on the loan

One of the key criteria that lenders assess is that an applicant is able to make timely repayments on a loan. This protects both the lender and the borrower from entering into a loan agreement that has a higher risk of defaulting, which can harm the borrower’s credit history. Hence, applicants must prove sufficient income to comfortably make timely repayments.

  • Show acceptable financial and credit history

The credit history as well as the financial circumstances of the applicant play a huge role in the approval decision for an unemployed loan. Those with a poor credit history or in difficult financial circumstances might not be eligible to apply. Every lender has its own threshold, so a rejection from one lender does not mean rejection from all.

  • Have enough income coming from eligible sources

Even if an applicant has sufficient income to qualify for a loan, this income must come from eligible sources. For example, many lenders do not accept applicants that have more than 50% of their regular income coming in from payments received through Centrelink. Similarly, some lenders do not allow payments received under Newstart program or Disability Support Pension to be considered as regular income.

  • Show sufficient assets to prove affordability

Owning assets can dramatically improve a borrower’s chances of being accepted for a loan, as such assets can be used as collateral to secure the loan amount.

  • Be over the age of 18
  • Be a citizen or hold a PR status in Australia

Some lenders also require borrowers to have regular weekly income of over $300, even in case of unemployed loans.

Most Common Loan Types Available For Unemployed Individuals

In Australia, the two most prominent types of loans that are accessible for unemployed people are personal loans and payday loans.

Payday loans are short-term loans that are usually given out for a loan term of under 1 year. These loans are typically capped at around $2,000 and usually charge a very high interest rate. Also, since the entire loan must be repaid, with interest and other charges, in a very short time span, this may make it difficult for unemployed borrowers to repay a payday loan on time. Hence, unemployed borrowers should only opt for payday loans of amounts that they are comfortable repaying with their current income level.

Personal loans are usually cheaper compared to payday loans, however they come with stricter eligibility criteria and loan application evaluation procedures. In addition to requiring borrowers to have a good credit history, personal loan providers also consider the borrower’s assets while making approval decisions.

In Australia, unemployed loans are usually split across three categories:

Small loans

Many lenders in Australia are offering small loans under $2,000 for a maximum period of one year for those applicants who are unemployed. These loans are usually unsecured, meaning they do not require any collateral.

Medium loans

These loans fall between $2,000 to $5,000 in value and are usually given out for a loan term of up to 2 years, depending upon the lender. Some form of collateral may be required with medium loans.

Large loans

Lenders offering large loans to unemployed individuals give out amounts above $5,000, although these are usually to be repaid within a period of up to 2 years as well.

Unemployed individuals might also like to consider guarantor loans or peer-to-peer loan options as good alternatives to traditional loan providers. These might be available at cheaper rates and also chances of approval might be higher for some applicants.

Application Process To Apply For An Unemployed Loan

The application process to apply for a loan is the same for an unemployed individual as it is for any salaried individual. Applicants must log onto the website of the lender they have chosen and click on the Apply button that must be placed on the website’s homepage.

After the application form has opened, applicants need to provide all required information, which may include the applicant’s ID information, bank statements, proof of income, details of the MyGov account (in cases where the applicant is receiving payments from Centrelink).

Once the form has been completed and submitted, lenders usually take a couple of days, at max, to deliver a verdict on the loan application. If approved, the loan amount is disbursed almost immediately, either into the borrower’s bank account or given out in cash, depending upon the lender’s default mode of disbursement and/or the borrower’s preference.