Rental Bond Loan: How Do I Apply?

Moving into a new property can bring emotions out of people that they weren’t even sure were there, to begin with.

The wave of happiness, joy, and excitement can quickly turn to stress, doubt, and sorrow when planning every little detail.

One speed bump that can arise early on is the prospect of paying an initial bond. For any renter, past or present, being burnt on a bond can leave a longing scar and cause worry just from hearing the word ‘bond’.

Paying all that money upfront can seem daunting, which is why there’s a neat little option if you find yourself short on cash; Rental Bond Loans.

What is a Rental Bond Loan?

A bond loan is a form of personal loan that helps you cover the bond for the short term of your rental property before the week’s rent starts. Typically, the money to cover the cost of the bond is given directly to the tenant who applied for the loan. This, in turn, is used to pay your bond either to your property manager’s account or lodge it with the Rental Bond Board.

Bond loans are incredibly useful to start your tenancy with a bit more cash flow affordability rather than moving into the property with no money to go off. They’re also a great option if you purely can’t pay a full rental bond upfront.

In general, there are two types of bonds advertised. Some are with an interest charge on top of moving costs, and some without. The loans without interest rely on the fees associated to perform the same role. At the end of the day, the loans end up summarising the same cost, so it’s more of a choice on your part rather than a clear-cut good or bad.

Am I Eligible?

Before nabbing up those extra funds, you first must verify you can apply for a bond loan.

According to the Queensland government’s website, several conditions must be met before gaining eligibility for a bond loan.

These conditions include:

• Being an Australian citizen or permanent resident, or have a bridging visa or temporary protection in Australia.
• Not owning or part-owning a residential property or a mobile home (caravan, live-aboard boat) that is connected to utilities in the home permanently.
• Not living in the property you currently are acquiring a bond for.
• Having less than $2500 in your bank account or cash among all the bond loan applicants that are applying (excluding dependents).
• The property chosen doesn’t hold a rental fee that is higher than 60% of the total weekly gross income of all applying applicants.
• There are also debt issues and bad credit problems prior that would have to be ironed out in your credit history before applying. It should also be mentioned that people experiencing family violence and domestic issues are automatically approved of bond loans, should they be verified of their circumstances.

If you’re still unsure, the QLD government website also offers a handy eligibility criteria tool to verify whether you are capable of receiving a bond loan or rental grant, which can be found here.

Income Limits

Just touching base prior, certain monetary instalment requirements for repayments must be met before going through the bond application process, namely the weekly income (or fortnightly) v.s. the bond loan associated with a monthly fee.

The weekly gross income mentioned earlier includes all forms of income received by all applicants applying, which can include wages from work, Centrelink and Veteran’s Affairs payments, and much more.

However, disability and Veteran’s Affairs pensions and income of dependent children under 18 years of age are not included in your gross income.

Income eligibility can be observed utilising a simple summary that takes into account how many individuals are applying for the bond assistance. To calculate the amount, please use the information below:

• First adult: $1,031.46
• Each additional adult $515.73
• Each dependent $309.44

Using the numbers above, an example of this could be two adults deciding to apply for a loan, initially costing the $1,547 amount. However, to add in a dependent would cause the amount to rise to $1,857, less than the amount it would cost for three adults, which would amount to $2,063.

For more info on income limits, samples of online applications, and application forms in general, follow the link here.

Where do I apply?

Many lender services supply rental bond loan offers all across Australia with online forms.

Certain offers and partnerships differ in requirements, as rentbond (a loan company called Fair Go Finance, utilised by Rent.com.au) is only open for individuals earning more than $500 per week, excluding the use of only receiving Centrelink benefits.

This restriction is not uncommon, as most bond loan providers uphold this rule. An alternative, however, is the Rentstart Bond Loan from the Department of Communities and Justice, which provides individuals eligible for social housing a chance to get their bond amount.

With so many different options to choose from, it can be difficult to choose the right one for you. If you’re unsure of where to apply for a bond loan, we can throw our two cents in and tell you to check out our friends at Incola here, where you can find out more about establishment fees, free loans and cash loans, and more if you’re from NSW, QLD or Victoria.

With a simple connection of 2 utilities with Incola, you can apply for an interest-free rental bond loan with MoneyMe. Incola will pay for your full rental loan amount up to $5000 to the authority and you’ll be good to go from a trusted bond authority.

For more information about renting, check out our blog section dedicated to all things Renting here. If you enjoyed the article, we cover everything from cleaning to moving in our Posts section.

Joshua Chadwick

SENIOR EDITOR