Pension Loans Explained – The Monzi Guide

Pension loans may make credit accessible for individuals receiving the Age or Disability Support Pension. Through a range of understanding lenders you can apply for cash amounts up to $10,000. Monzi’s lender-finder service may be able to match you with a potential lender; however, applying for a loan may not be your only option. Monzi explores all of this and more!

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

Alternatives to a pension loan

Please note, borrowing small amounts of money can be expensive and may not solve your financial issues. Please therefore consider the following alternatives:

Centrelink Advance Payment

You may be eligible for an advance of your regular Centrelink benefits. This advance is then repaid interest-free out of your future benefit payments. To check your eligibility, please head to the Services Australia website.

No Interest Loan Scheme

Alternatively, you may be eligibility for the No Interest Loan Scheme (NILS) if you receive a low-income. Here, you may be able to access interest-free finance of up to $1,500. NILS is available from a number of community organisations across Australia; you can check your eligibility here.

If you consider the options listed above and still wish to apply for a loan for pensioners, read on!

Pension loans explained

Pension loans, as you would expect, are a form of loan for people on Centrelink and receive a pension payment. This includes both the Aged Pension and the Disability Support Pension (DSP). Moreover, it may include a number of other government benefits too.

In short, these loans may be available for cash loans from $300 to $10,000 with repayment terms potentially ranging from 12 to 24 months. Not only that, they can cover almost any legitimate personal expense.

Best of all, you can apply for these loans online, whenever and from wherever you like. There’s no paperwork or meetings required. You can apply and receive an outcome all from the comfort of your own home.

If you apply with Monzi’s lender-finder service, we may be able to pair you with an understanding lender willing to offer the personal loans you need. Apply today.

Other pension loan schemes

While you could apply for a personal loan through a lender, the Government’s Pension Loans Scheme Australia could be an option too.

In short, this scheme is available for older Australians to help supplement their retirement income. Moreover, it is also available for other pension recipients too. If you would like a rough idea of what you will retire with, consider using a retirement income calculator.

Unlike a typical personal loan, the cash amount is not paid in a lump sum. Instead, it is delivered in fortnightly instalments. In most cases, you will need to use home equity as security on the loan.

Obviously, as with all loans, any money that you borrow through the scheme must be repaid with interest. However, the associated interest rates are typically lower than those offered by lenders.

Can I get pension loans with bad credit?

If you’re a consumer with bad credit history, then you might think your options are limited. Luckily, that may not be the case.

These days, lenders are more understanding of subpar circumstances including bad credit. As a result, you may still be able to access the bad credit loans you need.

In short, while lenders may still assess your credit, it will simply be one part of the process. They’ll look at your income and expenses too in order to determine what might be affordable for you.

If you’re in a secure financial position then you may be approved for a loan in spite of your bad credit history.

Pension car loans

We all rely on our cars. Whether you need to get to work or get the kids to school, having a reliable vehicle makes your life so much easier.

However, if you’re a pensioner, you might find it difficult to find a willing credit provider to help fund the purchase of your new car. Luckily, pensioner car loans may be able to help.

Lenders offering single parent pensioner loans may have eligibility criteria that aren’t quite as strict as traditional lenders. As a result, if you’re a low-income earner then there may be a loan product that’s right for you.

You can get the cash you need to purchase a new vehicle and spread the costs over the coming months or years. Hit the road in your new set of wheels today.

Can single parents get pension loans?


There may be a number of lenders willing to offer Centrelink loans for single parents. So, whether you receive the DSP or some other kind of government pension, there may be credit available to you.

In saying this, while these loans may be available, approval is not certain. You will still need to meet the lender’s qualifying criteria in order to be offered a loan. This will be based on an assessment of your credit history and financial situation.

Single parent pension home loans

A home loan is the single largest financial commitment that most people will make in their lifetime. While this may be the dream for many of us, often they’re not quite a reality.

If you are a single parent receiving a pension then unfortunately it may be difficult to find a lender or bank willing to offer you a mortgage. However, that doesn’t mean it will be impossible.

In short, if you apply for a home loan, you will need to prove that you have the capacity to make your repayments. If you are able to do this then approval may be possible.

At Monzi, we do not work with lenders offering home loans. As a result, you may need to do your own research. Consider getting in touch with a financial adviser.

Pension loans no credit checks

If you’ve got bad credit, then no credit check loans may feel like an appealing option.

In short, with these loans, rather than checking your credit report, lenders will focus solely on your financial situation (e.g. income, expenses, etc.). From this, they can get an idea of what might be affordable for you.

However, not all lenders will offer no credit check loans. As a result, their availability may depend on the lender that you are dealing with and their individual policies.

In any case, a credit check isn’t the be-all and end-all of your application. As we’ve already discussed, lenders are now more willing than ever to consider bad credit applicants. As a result, no credit check loans aren’t the only credit option for individuals with bad credit.

Pension payday loans

Payday loans typically refer to small unsecured cash loans up to $2,000. In short, they are there to cover those minor expenses that have a habit of cropping up at the worst possible moments.

Luckily, payday lenders work fast. You can apply and potentially have an outcome in no time. In addition to this, they’re only a short-term commitment. You can get the cash you need now and have your loan repaid in just 12 months.

So, whether you need to buy a new phone or pay for some minor car repairs, payday loans Australia may be an option for you.

How do I apply?

Applying with Monzi is simple. However, before you begin, first make sure that you are eligible. We have four boxes that you must check. See below:

  • 18 years or older
  • Australian citizen or permanent resident
  • Have a current email address and contact number
  • Have an online banking account with at least three months of history.

Once you’re eligible, you’re ready to apply. Just follow these steps:

  1. Select your loan amount and repayment term (where applicable).
  2. Provide the required personal and financial details. Then, submit your application.
  3. Our clever automated system will then attempt to pair you with an available lender. If you apply during business hours this may take as little as one hour.
  4. We’ll be in touch with an outcome. From there, if a lender is found, they will contact you to begin the assessment process.

How long does it take to get a pension loan?

In short, times will vary. While if you apply during business hours, we may be able to pair you with an available lender in just 60 minutes, following that, we are unable to provide a definitive answer.

After all, at that point, we’re not part of the process. Having said this, typically your lender will waste no time assessing your application so you can get an outcome ASAP.

If your application is approved then your cash will be transferred to you. Access will then be determined by the associated inter-bank transfer times.

Usually,expect a waiting time of up to 24 hours given the number of factors at play. However, if everything goes to plan then same day loans may be possible.

Pension loans two people sitting on bench overlooking sea

Are pension loans a bad idea?

Monzi cannot say if pension cash loans are right for you. Ultimately, it will come down to your financial situation. As a result, it’s up to you to assess your circumstances to determine if a loan is the right option for you.

As a guide, consider the following factors:

  • Your income and expenses
  • Your savings
  • Other outstanding debts or upcoming expenses
  • What repayments can you afford?
  • How much do you need to borrow?
  • Are there any ways you could cut costs to reduce the amount you need to borrow?

From this, you can determine if these loans are right for you. As a rule, only borrow what you can afford to repay. In addition to this, always ensure that your repayments are comfortable with your current budget.

Do pension loans affect credit?


Like with any loans, pensions loans may affect your credit score. However, whether this effect is good or bad will depend on how you manage your loan.

If you fail to make your repayments on time or default on your loan then your credit score will take a hit. This is the case with any credit contract that you enter.

On the other hand, if you make your repayments on time and pay off your loan without any issues then it is possible that you could see improvements in your credit score.

However, this is just a guide. Your credit score is calculated based on a number of different factors and as a result, we are unable to say with certainty how your credit score may be affected.

Instant loans for pensioners

Often, you’ll need your cash in a hurry. That’s where instant loans come in. With these products, lenders do what they can to provide you with an outcome ASAP.

However, keep in mind that an instant loan doesn’t mean you’ll get your money the second you apply. Instead, it means you’ll get an outcome so fast that it feels like no time has passed.

In reality, there will always be some processing time involved given that lenders must comply with their responsible lending obligations. Check them out below:

  1. The lender must make inquiries into the borrower’s financial situation and loan objectives.
  2. They must take steps to verify this information.
  3. Based on their inquiries the lender must make a final assessment as to whether the credit is suitable for the borrower.

Visit the ASIC website for further responsible lending details.

Unsecured personal loans for pensioners

With an unsecured loan, there’s no need to attach an asset as security. Simply make your scheduled repayments on time until you’ve repaid the balance of your loan.

Given that these loans are not guaranteed, lenders will typically only be willing to offer cash amounts up to $2,000. In other words, they’re small loans designed to help you cover those minor expenses.

If you are looking for a larger loan than this you will need to apply for a secured loan. With this, you will be required to attach an asset as security (e.g. your car or boat). These loans cover amounts ranging from $2,000 to $10,000.

I’m going to miss an upcoming repayment

If you are unable to make an upcoming repayment then you must contact your lender ASAP. Late or missed repayments will incur a few. However, with enough warning, your lender may be prepared to work with you to manage the situation.

Ultimately, it’s your responsibility to make contact. Lender’s are often understanding, however, prompt communication and proactivity is a necessity.

Pension loans financial hardship

Unfortunately, it is possible that you may suffer a major change in circumstances while repaying your loan. For instance, you may lose your job, fall ill or suffer an injury. With this, you can potentially find yourself unable to make your repayments.

If this occurs, you will need to contact your lender and apply for financial hardship. Lenders are experienced in dealing with these situations and will be able to guide you through the process.

In most cases, you will need to provide evidence that you can no longer meet your repayments (e.g. proof of termination or medical certifications) as well as an estimate of what you can now afford.

Your lender will consider this information and if your application is approved then revised repayment terms will be implemented.

Apply today

The below table shows the loans potentially available through Monzi’s network of lenders:

Small personal loan$300 to $2,000Unsecured
Medium personal loan$2,100 to $4,600Secured
Large personal loan$5,000 to $10,000Secured

Loans for people on a pension are available. Think they’re the right choice for you? Scroll up and use Monzi’s loan slider to apply now.

Factor In


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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440.

Disclaimer: Under the current legislation, all Small Amount Credit Contract loan providers don’t charge an annual interest rate. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The comparison rate on loans between $300 and $2000 could be up to 199.43%. The minimum loan term is 16 days and maximum loan term is 12 months. Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan.

Loan amount

$2,100 - $4,600


13 months (minimum)

24 months (maximum)


47.8% Annual Percentage Rate (APR)

65.85% Comparison Rate p.a.


Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88.

The maximum interest rate for a Medium Amount Credit Contract is 47.8%. Comparison Rate 65.85% p.a. The maximum loan term is 24 months. Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.

Loan amount

$5,000 - $15,000


13 months (minimum)

24 months (maximum)


17% Annual Percentage Rate (APR)

36% Comparison Rate p.a.


Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489.

The starting interest rate for a Personal Loan is 17%. Comparison Rate 36% p.a. The maximum loan term is 24 months. Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.