Mozo guides

Pensioner loans in Australia


So, the kids have all left the nest, work has become a distant memory, and you’re lapping up life in retirement. While work stress may be a thing of the past, you can still face financial pressure in your twilight years.

You never know what unexpected expenses will pop up – and if they do, it helps to have options. Whether it be for a new car, sudden medical expenses, or replacing a household appliance – a pensioner loan could be a potential finance option if you need extra cash.

What are my loan options as a pensioner? 

Loan options can sometimes be limited for pensioners or retirees as it’s hard to prove to the lender that you can make the repayments. This is because many retirees may not have a regular income and may be living from pension check to pension check (which just covers daily expenses).

Generally speaking, if you have a substantial amount of money sitting in a bank account as a pensioner, you’re likely in a much better position to prove you can make repayments and, therefore, borrow more money from a lender.

Borrowing options for pensioners

While there may be obstacles for pensioners when securing a personal loan, rest assured there are still options to help you out when things get a little tight.

While there may be obstacles for pensioners when securing a personal loan, rest assured there are still options to help you out when things get a little tight.

Personal loan with current provider: 

One benefit to having been with the same financial institution for a long time is that they should be pretty familiar with your financial history. 

This can make the personal loan application process more straightforward than if you were to apply from scratch with a new lender. Check out our guide on different types of personal loans to learn more.

Reverse mortgage:

Reverse mortgage loans are usually for retirees and pensioners who are ‘asset rich’ but ‘cash poor’. It allows people from the age of 60 to reverse the equity in their property into cash.

You don’t need an income to qualify or make repayments, but like any personal loan, there are interest and other fee charges. The debt is repaid to the lender when the borrower sells the property, moves into a retirement home, or the last surviving borrower dies.

Mozo doesn’t keep information in its database on providers that offer reverse mortgages. We suggest you check out the Government’s MoneySmart site for more information on reverse mortgages.

Government assistance options for pensioners


If you’re a pensioner struggling to get approval for a loan from a financial institution, the Government has implemented some special schemes to assist people on the pension.

  • Pensioner Loans Scheme: The Pensioner Loans Scheme is for seniors who are of pension age and get/or are eligible for a qualifying pension – this includes the Age Pension, Carer Payment or the Disability Support Pension. This scheme allows you to access capital tied up in assets to provide you with extra income.
  • Advance payment: If you’ve been receiving regular Centrelink pensioner payments, you may be eligible for an advanced payment of either one or three week’s pay. The amount must be repaid within six months, but the good news is that the advance payment is interest-free.
  • No Interest Loans Scheme (NILS): This is an interest-free loan of up to $1,500 to help cover essential household items, car maintenance or medical emergencies. You must hold a Government Centrelink pension card to apply for this scheme.

For more information, visit

Pensioner loan traps

It’s easy to fall for those loud, in-your-face instant cash loan ads. But while these ‘payday loans’ may seem like a quick financial fix when times are tough, they’re usually not all that they’re cut out to be.

Mozo doesn’t support these lenders for the following reasons:

  • Payday loans can become addictive, causing a vulnerable borrower to spiral into an unaffordable amount of debt
  • Payday loans come with hefty fees:  According to MoneySmart, most payday loans don't charge interest but can come with a heap of fees. You can typically expect a hefty upfront fee of 20% on the amount borrowed and around 4% in monthly service fees.  
  • Payday loans are short-term; therefore, the money needs to be repaid quickly (sometimes in as little as 30 days), which can place huge financial pressure on the borrower.

Read Mozo’s guide on short-term personal loans.

Other ways to earn cash as a pensioner

While you embrace retirement, you may find you have some extra time on your hands. Did you know you can stay in the workforce while on a pension?

The Work Bonus is a Government incentive for pensioners to remain in the workforce past the pension age by increasing the amount they can earn before their pension is reduced.Here’s a list of ways to earn some extra cash without having to take out a pensioner loan:

  • Sell stuff on eBay, Gumtree or Facebook Marketplace 
  • Have a garage sale – people love vintage clothes and knick-knacks!
  • Keep fit while earning some extra cash dog walking
  • Coach a local sporting team
  • Tutor university or school students in your field of expertise

For more information on and to compare personal loans, head to our personal loans comparison page.

Ava Crawford
Ava Crawford
Money writer

Ava is an experienced journalist with a degree in English Literature from New York University. At Mozo, she covers credit cards, personal loans and Buy Now Pay Later platforms.

Rhianna Dews
Rhianna Dews
Senior Money Writer

Rhianna, RG146 certified in Generic Knowledge and Deposit Products, has helped Aussies with finances for a decade. She's written for TechRadar, Simple Living Australia, and worked with Foxtel and Vodafone.