Loan on Maternity Leave? Here's How to Secure Funds

Finding yourself on maternity leave can be both an exciting and overwhelming time, especially when considering major financial decisions like securing a loan. If you're wondering whether it's possible to get a loan while on maternity leave in Australia, you're not alone. Many prospective borrowers face this challenge, trying to balance the joy of a new family member with the need for financial stability. The good news is that obtaining a loan during maternity leave is possible, with the right information and preparation.

Understanding Loans During Maternity Leave

When you're on maternity leave, your financial circumstances may temporarily change, affecting how lenders view your loan application. Lenders generally assess your ability to repay the loan by evaluating your income, credit history, and overall financial situation. Being on maternity leave doesn't automatically disqualify you from obtaining a loan, but it may present additional considerations for both you and the lender.

Typically, lenders are concerned about the temporary reduction in income during this period. However, they also recognise that maternity leave is a finite phase, and most borrowers will return to their regular income levels. Understanding how lenders assess your application during this time is crucial to navigating the loan approval process successfully.

Key Information: Rates, Requirements, and Options

Before applying for a loan while on maternity leave, it's essential to understand the current market conditions and what lenders are looking for.

In 2026, interest rates in Australia for personal loans typically range from 6.49% to 12%, depending on factors such as your credit score, loan amount, and term. Mortgage rates might be slightly lower, given the collateral involved, often ranging between 5.5% and 9%.

Eligibility criteria can vary, but generally include:

• Proof of income, including any maternity leave payments and partner's income
• Good credit history
• Employment verification and confirmation of return-to-work date
• Details of any other financial commitments

Esteb and Co, with access to 83+ lenders, can help you find a suitable loan option even during maternity leave. Depending on your unique situation, some lenders may offer more flexible terms, understanding the temporary nature of your reduced income.

Lender	Interest Rate	Special Conditions
Lender A	6.5% - 10%	Requires proof of partner's income
Lender B	7% - 11%	Flexible payment options during leave
Lender C	5.5% - 9.5%	Consideration for maternity payments

How to Secure a Loan During Maternity Leave

Here are the steps you should follow to improve your chances of securing a loan while on maternity leave:

1. Assess Your Financial Situation: Calculate your total income, including maternity leave payments and any other sources, such as your partner's income. Understand your monthly expenses and how much you can afford to repay.
2. Check Your Credit Score: Ensure your credit report is accurate and free of errors. A good credit score can significantly impact your loan terms.
3. Gather Documentation: Prepare your pay slips, maternity leave documentation, and any correspondence from your employer indicating your return-to-work date.
4. Explore Lender Options: Use a mortgage broker like Esteb and Co to explore multiple lenders and find those willing to consider your unique situation.
5. Apply for Pre-Approval: Getting pre-approved can give you a clearer idea of what you can afford and improve your negotiating power.
6. Communicate Clearly with Lenders: Be upfront about your situation, including your plans for returning to work, to help lenders assess your application favorably.

Tips and Considerations

Here are some expert tips and considerations for those on maternity leave looking to secure a loan:

• Consider Joint Applications: Applying with your partner can strengthen your application by combining incomes and reducing perceived risk.
• Plan for Unexpected Expenses: Ensure you have a financial buffer for unexpected costs that may arise during your leave.
• Seek Professional Advice: Consulting with a mortgage broker can provide invaluable insights and access to lenders more accustomed to working with clients on maternity leave.
• Evaluate All Loan Options: Look beyond traditional banks. Credit unions and non-bank lenders might offer more flexible terms.
• Stay Informed: Keep abreast of changes in interest rates and lending policies that may impact your loan options.

Frequently Asked Questions

Can I apply for a mortgage while on maternity leave?
Yes, you can apply for a mortgage while on maternity leave. Lenders may require additional documentation, such as proof of your return-to-work date and partner's income, to assess your application.

What impact does maternity leave have on my credit score?
Maternity leave itself doesn't impact your credit score, but reduced income may affect your ability to meet financial commitments, which could indirectly impact your credit if not managed carefully.

Are there lenders who specialise in loans for those on maternity leave?
Some lenders on Esteb and Co's panel are known for their flexible policies regarding maternity leave. It's advisable to consult with a mortgage broker to explore these options.

What type of loans can I apply for while on maternity leave?
You can apply for various loans, including personal loans, car loans, and mortgages. Each will have its own set of requirements and conditions, based on your financial situation.

Can my partner's income be considered for the loan?
Yes, including your partner's income can strengthen your application and improve your chances of approval, as it demonstrates a stable household income.

How does maternity leave affect my borrowing capacity?
Maternity leave can temporarily reduce your borrowing capacity due to lower income. However, lenders may take into consideration your post-leave income when assessing your application.