How to Get No Income Loans in Australia

If you’ve recently lost your job, an easy loan may be just the thing for you.

But what exactly do we mean by a no income loan? And more importantly, what do you need to do to get one? 

Here’s all you need to know about no income loans. 

What this article covers:

What Are No Income Loans?

They are personal loans tailored explicitly for people without a job or proof of employment. 

While being employed isn’t necessary to get the funds from a loan, you need to show your lender you can pay back the loan without your job earnings, a different source of money.

Even though the loan is called “no income”, it’s more of a “no job” or “no employment” loan. You may also hear these loans referred to as “no income proof loans.”

You don’t need to provide proof of employment to your loan provider. You only need to prove you can get the funds necessary to repay the loan.

no income loans

What Are Acceptable Sources of Income Other Than Jobs? 

Besides employment, you can earn money via countless other methods. Some of the most prevalent alternative sources of income include:

  • Unemployment benefits
  • Child Support
  • Alimony 
  • Pension accounts
  • Social security benefits 
  • Dividends form shareholdings
  • Royalty payments
  • Partner’s income 
  • Investment incomes 
  • Government bonds
  • Rental earnings 
  • Real estate/houses 
  • Gold or diamond jewelry 
  • Cars 

Types of No Income Loans in Australia 

They’re generally divided into two main types: NIVA loans and NINA loans.

No-Income-No-Assets Loans (NINA Loans)

A NINA loan is ideal if you don’t have any assets or a traditional source of income. 

With this type of loan, you only need to show your lender you have what it takes to pay back the loan. This can be through your Centrelink payments, rental earnings, etc. 

But since the lender cannot verify your earnings or assets, a NINA loan will usually have the highest possible fees and interest rates. 

loans with no income

No-Income-Verified-Assets Loans (NIVA Loans)

NIVA loans are taken out by individuals who are unemployed but have valuable assets to their name. 

When deciding whether to reject or approve a client, the lender will cross reference the asset’s value with the requested loan amount. If they’re comparable, the loan application will be accepted. If the loan amount exceeds the asset’s worth, you won’t be able to get the loan. 

Since you don’t need to provide proof of employment to get a NIVA loan, it’s popular among self-employed individuals and small-business owners.

Note: Consider NIVA loans as secured loans, whereas NINA loans are unsecured. A secured loan is considerably less risky than an unsecured one. As such, lenders tend to be much more lenient with the terms and conditions of a NIVA loan. 

How Much Can You Borrow?

It will depend on how much money you currently have or will have. Most lenders cap off the loan at $5,000.

Some will only go up to $2,000, and some will allow you to borrow $10,000 or more. But the amount will mainly depend on your financial capability. 

How Much Does It Cost?

These loans are on the more expensive side. That’s because they’re considered a high risk to loan providers.

For $2000 loans and less, expect your lender to charge you the maximum legal fees. This equates to a 20% establishment fee and a 4% monthly maintenance fee in Australia. 

If you’re borrowing $1,000 to be repaid in two months, you’ll end up paying:

  • Establishment fee: $200
  • Monthly maintenance fees: $80 ($40 x 2)
  • Total: $1,280

For bigger loans, you’ll be required to pay an interest rate and an establishment fee. The interest rate will be around 5.99% per annum, and the establishment fee will be about $400. 

no income loans australia

How to Get a Loan with No Income

Not every unemployed Australian will be approved for a loan. Still, this loan can be one of the easiest loans to get if you play your cards right.

You should get your finances in order. Pay your bills, previous loans, or credit card debts on time. Not only will this make your application more reassuring, but you’ll also improve your overall credit score. 

You can also try reducing your credit card limit. Since a credit card is a potential source of debt, it’s best to lower the limit as much as possible to keep yourself in the clear. 

Providing security is another great way to improve your chance of getting accepted.

By offering a valuable asset as collateral, lenders will have a foolproof way of making back their money if you ever default on the loan. As a client, you become much less risky, encouraging your lender to offer you better loan conditions and lower interest rates. 

But the best thing you can do is get a job or, at the very least, proof that you’re looking for one. It’s the most reassurance to put your lender’s mind at ease.

Once you’ve done all you could to better your chances of getting accepted, you should then apply for the loan. 

To do so, simply send an online application detailing how much you want, and attach the required documents to it. When the lenders review and approve your application, they’ll give you a call to confirm your details and negotiate the loan conditions.

how to get a loan with no income

Pros and Cons of Loans With No Income

You need to be aware of the advantages and disadvantages of these loans, which include: 

Pros 

  • Easily approved loan
  • Proof of employment isn’t necessary 
  • Good and bad credit clients can be accepted 
  • Centrelink recipients are welcome 
  • Short turnaround time 

Cons 

  • High fees and interest rates
  • Small loan amounts, barely exceeding $5,000
  • Short loan terms, rarely exceeding a year 

Eligibility Criteria of No Employment Loans in Australia

You don’t need much to get a no employment loan in Australia. You simply need to:

  • Be a citizen or permanent resident of Australia
  • Be 18 years old or older
  • Have had a regular source of money for at least three months 
  • Have a working email, phone number, and address

get a loan with no income

Conclusion

There are easy pay loans for everyone, even those with a non-traditional income source. Whether unemployed or unable to provide proof of employment, a no income loan can solve your problems. 

Granted, you won’t be able to borrow more than $5,000 in most cases. But it can be plenty if you’re smart about it. And if you offer an asset as collateral, you may be able to get more money with fewer fees.

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