Personal loans & eligibility: Your top questions answered

We get it. Sometimes personal loan eligibility criteria aren’t so clear cut. So, before you even consider applying for a personal loan, it’s super important to shop around and compare your options until you find the right loan for you.

By shopping around and doing your research, you can determine whether you meet any eligibility requirements before applying, and that way, hopefully, avoid rejection. Not to mention that nasty strike on your credit report that follows.

This is where Mozo’s personal loan comparison tool is your best friend, as it lets you compare loads of different personal loan products across the market based on your desired loan term and amount, so you can find a loan that best suits your budget.

So, to help make applying for a personal loan a little easier to navigate, we’ve gone and answered a bunch of your most-asked personal loan questions, so you can focus on the more important stuff, like whatever it is you need a personal loan for in the first place.

Does my credit score affect my eligibility for a personal loan?

Before we get into all the nitty-gritty personal loan eligibility requirements for a range of different employment and financial circumstances, first, let’s take a look at the one factor that impacts all potential borrowers chances of being approved for a loan - your credit score.

Can I get a personal loan with a bad credit history?

The shape of your credit report can either make or break your chances of being approved for a personal loan. A poor credit history of bad debt, late repayments or defaults could lead to your loan application being rejected, as the lender will question your ability to meet loan repayments.

Can I get a personal loan with no credit history?

By the same token, if you’ve never had a credit card, car loan or any other line of credit, and thus, haven’t yet established any credit history, then this could also make getting approved for a loan difficult as the lender has nothing to determine your credit-worthiness.


Each time you apply for a loan, the lender must run a hard enquiry (a credit check) to assess your eligibility for the loan, which is recorded on your credit report.

In the eyes of a lender, having too many hard enquiries made within a short period of time can raise a red flag and potentially jeopardise your chances of being approved for a loan, which is another reason why it’s imperative to shop around and make sure you’re eligible for a loan before applying.

Mozo’s Rate Matcher tool can help you find personal loans that you’re most likely to be eligible by running a quick credit check to pull tailored personal loans search results.

Can I get a personal loan on the pension?

Potentially. Getting approved for a personal loan as a retiree on the pension can be tough as you need to show the lender you’ll be able to keep up with regular loan repayments. This can be hard to prove without a regular income, but, with some solid savings, you’ll be in a better position to do so.

If your chances of being approved for a personal loan are slim, here are some of the alternate options available to pensioners looking to borrow money:

Reverse mortgage:

If you’re strapped for cash but own property, then one option is to apply for a reverse mortgage. A reverse mortgage lets Aussies over the age of 60 convert their property equity into cash. The good news is you don’t need an income to qualify, but watch out for fees and interest charges.

Government Assistance:

Here are some of the government assistance schemes available to pensioners needing extra funds:

  • Pensioner Loans Scheme: If you’re of the legal retirement age but aren’t eligible for the Pension because you own expensive assets or earn an income, then this scheme could provide you with additional funds by giving you access to capital tied up in assets.
  • Advance Pension payment: If you’re on the Pension and need some extra cash then you could potentially apply for an advance interest-free payment of 1-3 week’s pension payments. This will need to be repaid within 6 months.
  • No Interest Loans Scheme (NILS): This is an interest-free loan of up to $1,200 which you could be eligible to receive if you hold a Government Centrelink Pension card.

Be sure to check out our guide for more information on borrowing money as a pensioner.

Can I get a personal loan if I receive Centrelink payments?

It can be difficult, but it’s possible. As long as you meet any eligibility criteria and your Centrelink payments are not your main source of income, then you could potentially take out a personal loan whilst receiving Centrelink payments.

At the end of the day, it all depends on whether you can prove to the lender that you’ll be able to meet regular repayments and ultimately, pay off the loan. Keep in mind, some lenders will not lend to people who receive Centrelink benefits.

If you fit the criteria of a low-income earner who’s eligible to receive Centrelink benefits, then it’s likely that your current financial position won’t allow you to commit to paying off a personal loan. Legally, lenders must adhere to responsible lending conduct obligations, so granting you a loan that you can’t afford to pay back in the first place would be irresponsible lending on the lender’s part.

You should also note that taking out a personal loan could potentially disqualify you from receiving Centrelink payments. So, whether or not you should take out a personal loan, or would even qualify for one really depends on your own individual financial circumstances. 

Can I get a personal loan if I am a student?

Yes. If you’re a full-time uni student looking for some extra cash for a big upcoming purchase or just to get you through the next few years without a stable income, then you might consider taking out a student personal loan

From textbooks and living expenses to social events, the bills certainly start piling up when you’re in uni. So, unless you have a part-time job or are still a customer with the bank of mum and dad, then it’s not uncommon for a student to opt for a personal loan.

Can I take out a personal loan if I’m unemployed?

Maybe! A more flexible lender might be more inclined to approve you for a personal loan if you’re unemployed, so long as you can prove that can meet regular loan repayments. The lender will usually assess this based on whether you meet the following criteria:

  • You have some form of regular income: Even without a current job, you’ll still need to have some form of regular income to prove that you can stay on top of loan repayments.
  • Your credit report is in tip-top ship-shape: With comprehensive credit reporting, lenders have a more complete view of your credit history (i.e. both the good and the bad). So, you’ll want your credit report to have no negative strikes and a solid history of paying your bills on time.

Can I get a personal loan if I’m self-employed?

When it comes to personal loans and self-employment, unfortunately, the two don’t always mix. To be approved for a loan, the lender wants to be sure you can meet regular loan repayments.

If you’re a business owner, although you might be able to afford the loan, due to the unpredictable nature of self-employment, a lender is more likely to lend to someone who works for a company and earns a regular income, like a weekly wage, as they’re less of a risk.

So, if self-employment is getting in the way of you being approved for a personal loan, here are some other options:

  • Specialist lender: If you can’t get approved for a traditional personal loan, then there are specialist lenders out there that offer personal loans specifically for self-employed borrowers.
  • Low doc loan: Self-employed borrowers who are ineligible for a standard personal loan might go for a low doc loan instead. A low doc loan requires less documentation than a traditional personal loan, but watch out for higher interest rates and fees.

For more top tips, go check out our personal loan guides and articles. To compare loans, see our loans hub for comparisons of home loans, car loans as well as personal loan options.