The financial landscape for casual workers can be unique, often marked by fluctuating income and the challenge of budgeting when paychecks vary. However, when unexpected expenses arise—whether it’s a car repair, medical bill, or home improvement project—a personal loan can be a valuable financial tool. While savings and credit cards may offer short-term solutions, personal loans for casual workers are often better suited for larger funding needs.
At Handy Finance, one of our key eligibility criteria is employment or self-employment, making it possible for casual workers to access the funding they need. Let’s explore how personal loans can benefit casual workers and how you can improve your chances of loan approval.
Personal loans explained
What is a personal loan?
A personal loan is a loan that allows you to borrow a fixed amount of money, which is then repaid over a set period through fixed instalments. Lenders offer these loans with interest applied to the borrowed amount. Personal loans are a flexible financing option that can be used for various purposes, including:
- Car repairs
- Medical expenses
- Home improvements
- Consolidating existing debt
The loan term and interest rate depend on several factors, including your credit score, income and expenses.
Can casual workers get personal loans?
For casual workers, qualifying for a personal loan can feel challenging due to income variability. Many lenders may view irregular income as a higher risk compared to full-time employment. However, securing a personal loan as a casual worker is possible with the right approach.
What does Handy Finance consider?
Lenders typically look at several factors when assessing a loan application:
- Income stability: Even if your income fluctuates, demonstrating consistent earnings over a period can help show income stability.
- Employment history: A strong and steady employment history, even in casual roles, improves your chances of approval.
- Credit score: A good credit score reflects responsible borrowing behaviour, which can help secure better loan terms.
- Existing debt: Lenders assess your current debt levels to ensure you can manage additional loan repayments.
With careful planning and a strong application, casual workers can indeed qualify for personal loans.
Improving your chances of loan approval
Here are some practical steps to boost your chances of being approved for a personal loan as a casual worker:
1. Strengthen your credit score:
Before applying, check your credit score and work on improving it if needed. Paying down existing debts, making timely payments, and resolving any credit report discrepancies can help boost your score. A good credit score not only increases your chances of approval but can also lead to lower interest rates.
2. Provide clear proof of income:
Lenders will want to see evidence of your income stability. Collect payslips, tax returns (if applicable), and bank statements showing regular deposits. Even with a casual job, demonstrating consistency in your earnings can strengthen your application.
3. Apply for a smaller loan amount:
Consider applying for a smaller loan amount, which reduces the lender’s risk and may improve your chances of approval. Borrowing only what you truly need makes the loan more manageable in the long term.
4. Explore co-signer options:
If you have a partner or family member with a strong financial standing, consider asking them to co-sign for a joint loan. A guarantor can help secure the loan by providing additional assurance to the lender, especially if your income is irregular.
Responsible borrowing for casual workers
Personal loans can be a helpful financial tool, but responsible borrowing is crucial for casual workers due to income variability.
1. Budget carefully:
Create a budget that accounts for fluctuating income. Ensure you can comfortably make loan repayments without putting undue strain on your finances. Understanding your monthly cash flow can help you plan your loan repayments and avoid falling behind.
2. Avoid impulse borrowing:
It’s important to only borrow what you truly need and can afford to repay on time. Personal loans should be used for necessary expenses or emergencies, not for non-essential spending. Consider alternatives, such as saving up for non-urgent purchases.
Let’s get started
Securing a personal loan as a casual worker is entirely possible with the right approach. Understanding how personal loans work, being aware of the eligibility criteria, and strengthening your application can help you secure the funding you need. By budgeting carefully and borrowing responsibly, personal loans can serve as a valuable financial tool for managing unexpected expenses or investing in personal goals.
At Handy Finance, we are here to assist casual workers with their personal loan needs. If you have any questions about the loan process, don’t hesitate to reach out.
Approvals are subject to Handy Finance’s credit criteria and responsible lending requirements. Fees, charges, terms and conditions apply. Finance provided to approved applicants by OurMoneyMarket Lending Pty Ltd ABN 64 605 231 669, trading as ‘Handy Finance’ holds Australian Credit Licence number 488228 and is a member of the Australian Financial Complaints Authority (AFCA). The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, we recommend that you consider whether it is appropriate for your circumstances. We recommend you obtain independent advice before acting on any information in this article.