Bond loans: A guide for renters

By Polly Fleeting ·
couple-just-paid-bond-with-loan-collecting-house-keys

If you’re a soon-to-be tenant of a property, you’ll need to pay a bond before moving in. But not all bond agreements are the same and the costs can vary. Generally speaking, they come out to about 2 - 4 weeks worth of rent, which can end up being a few thousand dollars. Don’t fret if you don’t have this money saved upfront, there are financial options out there to help you cover the cost, including a bond loan

Below we take you through the basics, how to apply for a bond loan and the different conditions that might impact your application.

What is a bond loan?

A bond loan is a type of loan that is designed to help you pay for the cost of a rental bond you pay before moving into the property. A rental bond is like a security deposit for the apartment or house you decide to rent, and is held for as long as you live in the rental property.

what-is-a-bond-loan

Assuming there is no damage to the rental property, you will receive your bond back once you move out. So taking out a bond loan now in order to save for the future may not be the best decision as you could receive the money back later on anyway.  

Just bear in mind, if the property needs any repair as a result of any damage caused, the cost is covered with all or part of your bond. 

What bond loans are available in my state? 

State governments across Australia each have loan options available to help renters cover bond costs, each with certain criteria. 

Who’s eligible for these types of loans? Here’s a full rundown, state-by-state:

StateLoanCriteria
New South WalesRentstart Bond Loan - Australian citizen/permanent resident living in NSW 
- Eligible for social housing 
- Less than $3000 in assets 
- Able to sustain tenancy in private rental market 
- Rent no more than 50% of household’s gross weekly income
VictoriaRentAssist Bond Loan- Australian citizen/permanent resident living in Victoria
- Under asset limit of $13,378
- Under weekly income limits 
- Rent is less than 55% of your gross weekly income 
- You do not own or part-own a property
- Not owing any money on public housing tenancies
QueenslandBond Loan 









Rental Grant
- Australian citizen/permanent resident living in QLD (or have temporary protection/bridging visa) 
- Don’t currently live in property seeking bond loan for 
- Don’t own or part-own a property 
- Less than $2500 in cash or savings 
- No outstanding debts with QLD gov
- Rent is no more than 60% of your total gross weekly income
- Meet income limits

- Meet all conditions for Bond Loan 
- Not received a Rental Grant before 
- Meet at least one of the seven Rental Grant conditions
South AustraliaPrivate Rental Assistance Program - Property is in SA
- You have independent income 
- Less than $5,000 in cash, savings, a term deposit or shares 
- Under income limits 
- Rent is no more than $450 per week 
- Rent is no more than 50% of total assessable income (before tax) 
- Don’t have debt to Housing SA (or debt is less that $1,000)
Western AustraliaBond Assistance Loan Scheme - Australian citizen/permanent resident living in WA
- New Zealand citizens holding temporary or permanent visa 
- 16 years and above 
- Income source received in WA 
- Under income limits 
- Less than $2,500 in assets (single without dependants) or $5,000 (singles and couples with dependants)
Northern TerritoryBond Assistance- Australian citizen/permanent resident living in NT for at least 3 months prior to application (includes Special Category Visa and Temporary Protection Visa) 
- 18 years and older 
- No outstanding debt with NT Department of Local Government, Housing and Community Development 
- Assets below $5,000 
- Under gross income limit 
- Department will only provide 53%of weekly assessable income (before tax)
Australian Capital TerritoryBond Loans Rental- 16 and over 
- Enter into a tenancy agreement in the ACT 
- Under the income limit 
- Less than $10,000 in cash or savings (single) or $15,000 (couple)



While Tasmania doesn't have a governmental bond loan program, Tasmanian residents are able to apply for bond assistance through organisations like AnglicareTas if they need to.  

What other options do I have for getting a loan?

There are a few different options when it comes to taking out a rental bond loan, whether it’s from a personal loan lender or the government. Most of these loans and schemes can be applied for online, over the phone or in person.

types-of-bond-loans

1. Small personal loan

A bunch of lenders offer small loans under $10,000 to potential borrowers. If you are considering this option, it’s important to weigh up things like the interest rate, fees, flexible repayment options and any bonus features. That way you will be able to properly assess whether a small personal loan to cover your bond is a suitable option within your budget. If you’re ready to start your search for small loan options, try out our Personal Loan Comparison Calculator

2. Government assistance loan: 
 

When it comes to helping Aussie renters, most Aussie state governments offer loans that do just that. They are designed for people with lower incomes, who may not be able to afford the upfront cost of a rental bond. The loans are interest-free and ultimately are aimed to give people access to the private rental market as opposed to public housing. 

3. Short term or payday loan:
 

According to the Mozo database, the smallest personal loan you can apply for is $500, offered by both Unity Bank and Regional Australia. However, there are quick cash or payday loans on the market that offer smaller amounts and often get the cash to you quicker. The catch is, these loans often have extremely high interest rates and fees attached to them and require you to pay down the debt faster. For more information on these types of loans, check out the Australian Government moneysmart website

Can Centrelink pay for my rental bond?

Currently, Centrelink does not offer the option to pay for your rental bond. 

However, there is the option to apply for Rental Assistance which continues for as long as you are a tenant and still remain eligible for the scheme. 

In order to qualify for Rental Assistance from Centrelink you must be either

  • receiving certain Centrelink payment already
  • getting more than the base rate of Family Tax Benefit. 

You must also be paying ONE of the following:

  • rent 
  • retirement village fees
  • lodging
  • board and lodging
  • site or mooring fees (if your main home is a caravan, relocatable home or boat).

For more information on Rental Assistance, jump over to the Services Australia website.

Can you get a bond loan with bad credit?

While taking out a bond loan with bad credit may not be easy, it isn’t impossible. A handful of lenders offer loans that come with a range of tiered interest rates that are based on your credit history. So if you wish to take out a loan with bad credit, you may end up copping a high interest rate. 

Alternatively, you may qualify for one of the government bond loans, which are interest free. So make sure you check if you are eligible before you consider taking out a loan with a bank, credit union or peer-to-peer lender. 

How do I actually apply for a bond loan? 

Depending on which loan loan you are after, there are a range of ways you can apply, including online, over the phone or in person.   

While not all bond loan applications are the same, there are some general pieces of info you need handy before you start the process. 

Here’s a breakdown:  

  • Your personal and contraction information (name, birthdate, email, address, phone number) 
  • Identity documents (driver’s license, passport, medicare card etc.) 
  • Bank statements 
  • Proof of income (payslips) 
  • Tax return documents 
  • Proof of assets 

Bear in mind that if you are applying for a government bond loan there may be some other info required to prove you meet the specific lending criteria.

Polly Fleeting
Polly Fleeting
Money writer

Polly Fleeting is a personal finance writer here at Mozo, specialising in loans and credit cards. Her work is aimed at helping people find ways to make smart product choices, reduce debt and get more for their hard-earned dollars. Polly has a degree in Journalism from the University of Technology, Sydney.