Finty

Compare personal loans for pensioners

Set your amount and term to see the repayment and total cost of 6 personal loans for pensioners side by side, so you know what you'd pay before you apply.

Some lenders count the Age Pension or other Centrelink payments as income, usually alongside other income. Most limit how much of your income can come from Centrelink.

Written byAndrew Boyd
Why these loans? We list a loan here only when its lender's own website says it considers Centrelink income.
  • Liberty: “the majority of your income cannot be from Government benefits” Source
  • Pepper Money: “Centrelink can be used as a secondary income in conjunction with PAYG income” Source
  • Jacaranda Finance: “Yes, you can apply for a loan with Jacaranda Finance if you receive Centrelink or other government benefits; however, to be eligible to apply we require that the majority of your income be paid by an employer.” Source

Every lender still checks each application, so being listed here doesn't mean you'll be approved.

What will it cost you?

Enter how much you want to borrow and for how long, and we'll show your monthly repayment and total cost on every loan below, at each one's lowest published rate.

5 loans

Repayments use each loan's lowest published rate and include any monthly fee. The total adds the establishment fee. The rate you are offered depends on your circumstances. Comparison rates are for the lender's own example loan, usually $30,000 over 5 years.

WARNING: A 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 comparison rate.

Personal loans for pensioners at a glance

Worked out from the 6 loans from 3 lenders we compare on this page.

Typical comparison rate

6.76%

Half the loans start between 6.12% and 24.96%.

No monthly fee

4 of 6

loans that state a monthly fee set it at $0.

Fixed or variable

6 fixed0 variable
How starting comparison rates are spreadNumber of loans in each band. The most common is 5–7%.

The short version

  • Pensioners can get personal loans if they can show they can afford the repayments on their income.
  • Some lenders count the Age Pension and other Centrelink payments as income.
  • Look at the Home Equity Access Scheme, NILS and Centrelink advances too.

Can a pensioner get a personal loan?

Yes, but your choice is narrower. Lenders must check you can afford the repayments, and many either don't count the Age Pension, Disability Support Pension or Carer Payment as income, or limit how much of your income can come from Centrelink. Some want at least half your income to come from elsewhere.

Non-bank lenders are more likely to consider you. Having other income, such as super drawdowns or part-time work, or an asset to offer as security, helps.

How much can you borrow?

On a pension alone, expect smaller amounts, often a few thousand dollars, because the lender has to leave enough of your income for living costs. A long relationship with your bank, savings, or an asset to offer as security can mean a larger loan.

The risks

  • Taking on more debt than a fixed income can carry. Check you can still cover food, rent and bills after each repayment, or you could end up in financial hardship.
  • Higher rates, as many lenders price for risk using your income, age and credit history. Security and a clean credit report can bring the rate down.
  • Higher fees, such as a large establishment fee.
  • More paperwork: proof of your pension and other income, the assets you own, bank statements and your debts.

Pros

  • Set repayments and an end date.
  • Cheaper than most credit cards for larger costs.
  • A clean repayment record helps if you need credit later.

Alternatives

A personal loan isn't always the least costly way to get extra money on a pension. These options carry different costs and risks.

Home Equity Access Scheme

Run by Services Australia, this lets people of Age Pension age who own Australian property borrow against it, as fortnightly payments or limited lump sums. It replaced the Pension Loans Scheme. It charges interest, and the debt is usually repaid when the property is sold. Check the current rules and rate with Services Australia.

No Interest Loans (NILS)

NILS loans have no interest, fees or charges, so you repay only what you borrow. They're for essentials such as appliances, car repairs, medical and dental bills, or a laptop for study, not for rent, bills or other debts. You'll usually need a Pension or Health Care Card or a low income. Loans are arranged through community organisations across Australia.

Overdraft

An overdraft on your bank account needs your bank's approval, but once you have one you pay interest only on what you use. It can help when bills fall due a little before your money arrives.

Home loan redraw

If you have a home loan and have paid extra, a redraw facility lets you take those extra repayments back out. Money left in redraw reduces the interest on your home loan in the meantime.

Reverse mortgage

Homeowners over 60 can borrow against their home's value, with the amount rising with age. The debt and interest grow over time and are repaid when the home is sold, so get independent advice first. Money drawn from a reverse mortgage isn't counted as income, but it can count as an asset if you leave it in the bank, which can affect your pension.

How to apply

Applying for a personal loan as a pensioner usually takes 15 minutes online. Most lenders give a decision within a day or two, and some within the hour.

  • Check your rate first. Many lenders show the rate you'd get with a soft check, which doesn't show as a credit enquiry, before you formally apply.
  • Have your details ready. Lenders ask for ID, payslips or tax returns, your spending, and the debts and credit limits you already have.
  • Apply to one lender at a time. Each formal application is recorded on your credit report, and several close together can make lenders more cautious.
  • Read the contract before you sign. Check the comparison rate, every fee, and what happens if you repay early or miss a repayment.
  • Have your Centrelink income statement ready. You can download it from myGov.

Questions people ask

Does a personal loan affect my pension?

Borrowed money isn't income, so the loan itself doesn't change your pension. But money from the loan left sitting in your bank account can count towards the assets and income tests.

Should I apply to several lenders at once?

No. Each application is recorded on your credit report, and several in a short time can make lenders more cautious. Compare first, check your credit score, then apply for the one loan that suits you best.

What rate will I get?

Most lenders set your rate from your credit history, income and the loan itself, so the advertised rate is the lowest you could get, not the rate everyone gets. A rate quote with a soft check shows your own rate before you apply.