What Income Can Be Considered in a Loan Application?

Are you unsure whether your wages, casual earnings, government payments or other income may count when you apply for a loan?

Different lenders can assess income in different ways. Generally, your income will need to be legal, regular, verifiable and reasonably likely to continue while you are making repayments.

At Sunshine Loans, we also look beyond the amount you earn. We need to consider your broader financial circumstances and assess whether the proposed credit contract would be unsuitable.

Meeting a minimum income requirement does not guarantee that your application will be approved.

What Income Counts in a Loan Application?

Depending on the lender and credit product, income from employment, self-employment, government payments, investments and other regular sources may be considered.

The amount you receive is only part of the picture.

When income is assessed, relevant factors may include:

• How regularly you receive it.
• How long you have been receiving it.
• Whether it is reasonably likely to continue.
• Whether it can be verified.
• Your existing expenses and financial commitments.
• How much money you have left after essential living costs.
• Whether another repayment could cause financial hardship.

This is why two people earning the same amount can receive different application outcomes. Their debts, expenses, income stability and other circumstances may be very different.

Types of Income That May Be Considered

Acceptance criteria vary between lenders, but some common income sources that may be considered include:

Variable income does not always receive the same treatment as a fixed salary.

For example, a lender may average overtime or commissions rather than relying on one unusually high pay period.

How Are the Income Requirements for a Loan Assessed?

Your Income Should Be Regular

A consistent income history helps show whether money is likely to remain available when repayments are due.

Working casually or having changing hours does not automatically mean your income cannot be considered. However, a lender may look at a longer period of income records to understand what you usually earn.

The same general principle can apply when you:

• Work under a contract.
• Have seasonal hours.
• Receive commissions.
• Work more than one job.
• Receive income from several sources.

Your Income Needs to Be Verifiable

A lender will usually need evidence showing that the income you declare is genuine.

Depending on your circumstances, this evidence might include:

• Recent bank statements.
• Payslips.
• Employment information.
• Government payment statements.
• Tax returns.
• Australian Taxation Office Notices of Assessment.
• Business records.
• Rental or investment records.

You should always provide complete and accurate information when applying for credit.

Never:

• Change or falsify financial documents.
• Overstate your income.
• Deliberately leave out debts or expenses.
• Misrepresent your employment arrangements.
• Provide another person’s financial information as your own.

Take-Home Income Is Different From Gross Income

Your gross income is what you earn before tax and other deductions.

Your take-home income, sometimes called net income, is what remains after those deductions and is generally the amount that reaches your bank account.

For our current eligibility requirements, we use take-home income when considering whether you meet the minimum income threshold.

Your Expenses Matter Too

Income is only one part of an affordability and suitability assessment.

We also need to understand your expenses and existing financial commitments before assessing whether the proposed credit contract would be unsuitable.

These may include:

• Rent or mortgage payments.
• Groceries and household expenses.
• Utilities.
• Transport costs.
• Insurance.
• Medical expenses.
• Childcare.
• Existing personal loan repayments.
• Credit card commitments.
• Buy now, pay later commitments.
• Other regular financial obligations.

Moneysmart recommends checking whether loan repayments will fit within your budget before committing to borrowing.

Can Casual Employment Income Be Considered?

Yes.

Casual income may be considered in some circumstances when it is regular, verifiable and reasonably likely to continue.

Because casual hours can change, a lender may review several weeks or months of deposits or payslips rather than relying on one particularly high-paying week.

When we assess your application, we need to understand your usual financial circumstances rather than simply looking at your strongest pay period.

You should therefore use a realistic figure when working out what you normally earn and what repayments may fit within your budget.

Can Centrelink or Other Government Payments Count as Income?

Some lenders allow certain government payments to form part of assessable income, while others apply restrictions to the payment types or amounts they accept.

For our current eligibility requirements, your take-home income can include a combination of employment earnings and government benefits.

However, government benefits cannot be your only source of income when you apply with us.

If you are unemployed or receive only government benefits, you do not meet our current income criteria.

Meeting this income requirement does not mean your application will automatically be approved.

We assess each application individually and also consider your expenses, existing commitments, requirements and objectives, and whether the proposed credit contract would be unsuitable.

What Are Our Current Income Requirements?

To be considered for one of our Medium Amount Credit Contracts, you generally need to:

• Be at least 18 years old.
• Receive regular take-home income of at least $750 per week or $1,500 per fortnight.
• Have income from employment, or a combination of employment income and eligible government benefits.
• Receive income from legal and verifiable sources.
• Have your take-home income visible and verifiable through your bank statements.
• Be able to afford the proposed repayments without experiencing financial hardship.
• Require credit for a personal, non-business purpose.
• Complete our application and assessment process.

Government benefits cannot be your only source of income.

These requirements are eligibility criteria, not a promise of approval.

We still need to assess your individual circumstances and determine whether the proposed credit contract would be unsuitable.

You can review our full Loan Eligibility information before deciding whether applying may be appropriate for you.

Our Current Loan Information

We offer unsecured Medium Amount Credit Contracts to eligible customers seeking credit for an appropriate personal expense.

Our current product features include:

Applications are subject to our eligibility requirements, individual assessment and approval.

Our product is designed for relevant personal, non-business purposes, such as certain infrequent, unexpected or one-off expenses.

It is not intended for regular, ongoing ordinary household expenses, except in the limited circumstances described in our Target Market Determination, such as accumulated arrears or unusually high costs arising from special circumstances.

Before borrowing, review:

• The repayment amount.
• The interest rate.
• Applicable fees.
• The loan term.
• The total amount repayable.
• Whether another option may be more appropriate.

Examples of How Income May Be Assessed

These fictional examples show why the source, consistency and reliability of income can matter as well as the total amount received.

They do not represent actual customers, lending decisions or guarantees of approval.

Example 1: Regular Part-Time Wages

Taylor works part-time and receives a similar amount each fortnight. The wages are clearly visible in Taylor’s bank account.

This payment history may help establish Taylor’s usual income.

However, income alone would not determine the outcome. Expenses, existing debts and the affordability of any proposed repayment would also need to be considered.

Example 2: Casual Employment and Government Benefits

Jordan receives casual employment income as well as an eligible government payment.

When assessing an application with us, these income sources may potentially be considered together when our eligibility requirements are met and the income can be verified.

The government payment cannot be Jordan’s only source of income.

We would still need to assess Jordan’s overall financial circumstances and whether the proposed credit contract would be unsuitable.

Example 3: Irregular Overtime

Alex receives a regular base wage, but overtime changes significantly from month to month.

A lender may place greater weight on the regular base income or consider an average of the overtime received over a relevant period.

One month of unusually high overtime would not necessarily show that the same income will continue.

Example 4: Enough Income but High Commitments

Morgan earns more than a lender’s minimum income threshold but already has substantial rent, credit card and vehicle repayment commitments.

Another repayment may still be unaffordable.

This illustrates why meeting a minimum income figure is only one part of a credit assessment.

How to Prepare Proof of Income for a Loan Application

Taking time to understand your finances before applying can help you provide accurate information and decide whether borrowing may be appropriate.

Review Your Bank Statements

Check that your regular income is visible and your account details are correct.

It can also be useful to review where your money is going so that you have a realistic understanding of your essential and discretionary spending.

Gather Relevant Documents

Depending on the lender and your circumstances, useful records could include:

• Payslips.
• Employment information.
• Government payment records.
• Tax documents.
• Bank statements.
• Business records.
• Rental or investment statements.

Work Out Your Usual Take-Home Income

Use a realistic average when your hours or payments change.

Basing your budget on your highest-earning week could give you an inaccurate picture of what you can regularly afford.

List Your Existing Financial Commitments

Include your current:

• Credit cards.
• Personal loans.
• Buy now, pay later commitments.
• Vehicle finance.
• Payment plans.
• Other regular repayments.

Complete and accurate information is important when your financial position is being assessed.

Check the Repayments Against Your Budget

Consider what your budget would look like after making the proposed repayment.

It is also worth considering whether you could continue making repayments if:

• An unexpected expense arose.
• Your income temporarily decreased.
• Your regular living costs increased.
• You received fewer work hours.
• Another existing expense became due.

Moneysmart recommends using a budget to compare the money coming in with the money going out before deciding what you can afford to repay.

What Can You Do if Your Income Does Not Meet the Requirements?

Do not change, omit or misrepresent information in an attempt to qualify for credit.

Instead, consider whether there may be another way to manage the expense.

Depending on your situation, alternatives may include:

• Using available savings.
• Asking a service provider about a payment plan.
• Delaying a non-essential purchase.
• Asking a lender or service provider about hardship assistance.
• Reviewing your household budget.
• Checking whether you qualify for a No Interest Loan.
• Asking Services Australia whether an advance payment is available to you.
• Speaking with a free financial counsellor.

Moneysmart states that eligible Australians may be able to access a No Interest Loan for certain essential goods, services and housing-related costs.

If you are struggling to pay for essentials such as food, rent or utilities, taking on additional credit may not be the right solution.

Free financial counselling and urgent money support are available through community services, including the National Debt Helpline on 1800 007 007.

Frequently Asked Questions

Is There One Minimum Income Requirement for Every Loan?

No.

Income requirements vary between lenders, products and individual circumstances.

A minimum income threshold is also different from an affordability or suitability assessment.

Even when you meet the stated minimum, the lender may still need to consider your:

• Expenses.
• Existing debts.
• Income stability.
• Requirements and objectives.
• Capacity to make the repayments.

Can I Apply for a Loan if I Work Casually?

Casual workers may be considered by some lenders when their income is regular, verifiable and sufficient to support the proposed repayments.

Because your hours can vary, you may need to provide a longer income history.

For our product, you also need to meet our current eligibility and affordability requirements.

Does Overtime Count as Income?

Regular overtime may sometimes be considered, but treatment differs between lenders.

Variable overtime may be averaged or given less weight than fixed income.

An isolated period of unusually high overtime may not be considered representative of your ongoing earnings.

Do Centrelink Payments Count Towards Our Income Requirement?

Eligible government benefits may form part of your required income when they are combined with employment earnings.

Government benefits cannot be your only source of income when applying with us.

Does Meeting Our Minimum Income Requirement Mean I Will Be Approved?

No.

Meeting our minimum income requirement is only one eligibility factor.

We must also assess your overall financial circumstances, including your:

• Expenses.
• Existing commitments.
• Requested loan amount.
• Loan purpose.
• Requirements and objectives.
• Ability to manage the proposed repayments.

Approval is never guaranteed.

Why Might an Application Be Declined Even When I Earn Enough?

An application may be declined for several reasons even when your income meets a stated threshold.

These could include:

• Significant existing financial commitments.
• High living expenses.
• Inconsistent income.
• Incomplete or inaccurate information.
• An unsuitable loan purpose.
• An assessment that the proposed credit contract would be unsuitable.

The outcome depends on your individual circumstances.

Understand Your Income and Affordability Before Applying

When you are considering a loan, the amount you earn is important, but it is not the only factor that matters.

The source, consistency and verifiability of your income can all form part of an assessment, along with your expenses, existing commitments and ability to afford another repayment.

Before you apply with us:

• Review your usual take-home income.
• Check your regular and irregular expenses.
• Include all existing debts and commitments.
• Read our current Loan Eligibility information.
• Review our Loan Costs and frequently asked questions.
• Consider suitable alternatives to borrowing.

When you believe our Medium Amount Credit Contract may be appropriate for a specific personal expense, consider the total costs, available alternatives and effect of the repayments on your budget before deciding whether to proceed.

All applications remain subject to our eligibility requirements, individual assessment and approval.

The information provided in this blog is for general informational purposes only and does not constitute financial or legal advice. It is not tailored to the specific circumstances of any individual. Before acting on the information, you should consider whether it is appropriate for you, having regard to your objectives, financial situation and needs.