A borrower’s risk factor might convince a bank or lender to approve or reject a personal loan application. Those who have maintained permanent employment over a long period of time are generally viewed as lower-risk applicants—having a regular stream of income means a borrower is more likely to meet regular repayment requirements. Casual employees who apply for personal loans could be viewed as higher-risk applicants, as irregular hours can lead to cash flow issues, meaning meeting payment requirements could be problematic at times.
Though obtaining approval for a personal loan could be difficult for casual employees, this doesn’t mean it’s an impossible feat. Some lenders do make exceptions for casual employees, while others may have personal loans tailored specifically for such applicants.
Who offers personal loans for casual employees?
Though casual employees could have a hard time getting a personal loan approved by a major bank or financial institution, many smaller banks and lenders will approval personal loans for casual employees who meet their eligibility criteria. Such criteria could include the following:
- A minimum age of 18
- A minimum yearly income, which would vary with each lender
- A minimum period of employment at current employer
- A good credit rating
Interest rates for casual employees
As a casual employee would be considered a higher-risk borrower, personal loans for casual employees might attract a higher-than-usual interest rate. While this could reduce the risk factor for the lender, it would result in higher weekly or monthly repayments.
Essential documents for casual employees
As with all personal loans, casual employees applying for a personal loan will have to provide the lender with various documents to prove their eligibility for the loan. These will vary with the lender, and could include the following:
- Proof of identity such as a passport or driver’s licence
- Proof of income such as recent pay slips and tax returns
- Proof of financial status such bank statements and credit card statements
Pros and cons of personal loans for casual employees
Having a personal loan approved will no doubt assist you to pay for that holiday, buy that car you need for your daily commute to work or get you the extra cash required for a personal project. The interest rate associated with a personal loan could be lower than that of a credit card, meaning you could end up paying far less in interest.
That being said, the application process for personal loans for casual employees could be lengthy – if you’re hoping to obtain approval for a small loan for a quick purchase, using a credit card for the purchase could be a more convenient option. If you’re after a larger loan, it’s important to be certain you will be able to meet your repayment requirements – missing repayments or defaulting on your loan could lead to bad credit history, which could affect the approval of future loans or credit.
As with any financial decision, it’s important to do your research prior to committing to a loan. Visit RateCity’s personal loan comparison page to find out more about personal loan options which suit your needs.