Is There a Loan for Casual Workers in Australia?

Being a casual worker comes with its own pros and cons. But where does getting a loan fall within these two categories?

Does having a casual job prevent you from getting a loan, or does it make no difference? Keep reading to find out all this and more. 

What this article covers:

Can You Get a Loan with a Casual Job?

Fortunately, yes.

Many financial establishments offer personal loans for casual employees. These loans typically range from $500 to $5,000, and they require no collateral or security. 

Still, it’s worth noting that even if you’re a casual worker, you’re not guaranteed to get a loan for casual workers. If you’re deemed too risky of a client, the lenders will promptly reject your application. 

We’ll discuss below what can make you seem like a high-risk client. But, for now, let’s see what constitutes a casual worker.

loan for casual workers

What Is a Casual Worker?

Quite simply, a casual job is when you work without an agreed-upon schedule. Since this means work hours can considerably fluctuate from one day to another, the income will also be unstable. As such, many financial agencies consider casual workers as high-risk. 

Now, many people get confused between casual workers and part-time employees. While both can work across any industry and profession, there’s actually quite a distinction between them. 

For instance, while casual workers have no guaranteed hours, part-time employees work regular hours each week. In fact, part-time employees either have a fixed contract or are permanent employees. As such, they’re entitled to sick pay, annual leave, or other benefits offered to full-time employees. 

Casual workers, however, don’t have the same luxury. If they ever get sick or need to stop working, their income will be severely compromised. On the flip side, they have a higher pay rate than part- and full-time employees. So, it’s not all bad. 

Still, casual workers are inherently more risky than part- and full-time employees. As such, personal loans for part-time workers are usually easier to get than those for casual workers.

Nevertheless, there are a few things that can make your application more appealing. So, let’s see how you can win over your loan provider. 

Tips for Getting a Loan on Casual Employment

To make yourself less of a risk in the eyes of your lender, here are a few things you can do:

Work for at Least 3 Months

By working for at least 3 months, you can show your loan provider that you have a stable job and, therefore, a stable income. At the very least, you’ll be out of probation, giving you a reliable impression. 

Of course, the longer you work in the same place, the more trustworthy you seem and the better a lender can assess the stability of your income. That’s why some lenders ask for 6 months of steady employment. Some even look for applicants who’ve worked for a year or more as employees.

So, as a general rule, the longer you’ve worked at a place, the higher the chances of getting accepted for casual employment loans. 

loans for casual workers

Get a Recommendation Letter

A recommendation letter from your employer can significantly improve your chances of getting a loan for casual employees.

With a recommendation letter, the loan provider will be able to verify your employment as well as your average weekly hours, hourly rate, and duration of employment. 

It’ll also be quite helpful if your employer states there’s no reason why you shouldn’t continue in your current place of work. 

Match the Minimum Imposed Income 

Frequently, lenders will impose a minimum income that the client needs to meet. Typically, this number is around $15,000-$20,000, though it can vary from one lender to another. Accordingly, casual employment loans are considered a type of low-income loan. 

As long as you meet the stated minimum income, your lender will be assured you have what it takes to make your loan payments. 

Have a Good Credit Score

It goes without saying that having a good credit history will help you get approved for a loan. The higher your credit score, the more likely a lender will be to give you a loan. 

So, make sure you pay all your bills and loan payments on time. If you miss or delay a payment, your credit score will start to dip. The same will happen if you don’t pay the required amount in full or if you apply for multiple loans in a short span of time. 

Provide Security

By having a valuable asset, you improve your chance of getting a loan for casual workers. Not only that, but security can allow you to get a loan at a lower rate.

Basically, by offering an asset of value, your lender has a foolproof way of making back their money in case you ever default on the loan. As such, you become much less risky as a client, encouraging your lender to offer you better loan conditions. 

personal loans for casual employees

How Much Do Personal Loans for Casual Workers Cost? 

Depending on how much money you borrow, the total cost of your loan will vary. 

The Australian Securities & Investments Commission (ASIC) states that all small loans can’t have an interest rate. So, if your loan is $2,000 or less, you’ll only be required to pay an establishment fee and a monthly fee. 

The maximum a lender can charge is a 20% establishment fee and a 4% monthly fee. So, if you’ve borrowed $1,000 to be repaid in 3 months, you’ll end up paying:

  • Establishment fee: $200
  • Monthly fee: $120 ($40/month)
  • Total: $1,320

But what about larger loans nearer to the $5,000 mark?

These loans will have an interest rate as well as an establishment fee. Typically, the interest rate will be around 5.99% per annum, and the establishment fee will be somewhere around $400. 

What’s the Loan Term of Casual Employment Personal Loans?

Generally, these loans have a loan term of 16 days to 52 weeks. As such, they’re considered short-term loans, similar to the loans offered to job seekers, students, and the self-employed. 

In a few cases where the loan amount exceeds $2,000, you can have up to two years to repay the loan. However, most lenders will only offer up to a year. 

The longer your loan term, the smaller your weekly or monthly repayments will be. However, this will mean more monthly fees or cumulative interest rate. 

The main point to consider when choosing your loan term is to pick a duration that allows you to make your payments fully and on time. That way, you can avoid late payment fees and a bad credit score. 

casual employment personal loans

Conclusion 

A loan for casual workers is an unsecured personal loan for less than $5,000. 

The trick for getting the loan is to make your application irresistible. Show your future loan provider that you’re a dependable person who’ll have no issue paying back the loan. As long as you do that, you’ll be able to get the loan in no time. 

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