All You Need To Know About Bond Loans

Need to suddenly move but don’t have the cash for both the move and the bond? A bond loan can help you out. Through this you can pay your bond back in instalments instead of a large lump sum, giving you or your family much needed cash to complete the move.

While often the bond on your previous place can be used to pay for the new bond, if this figure decreases or you find that you need a large portion for the move, bond loans can help you out. But what exactly are bond loans and how do they work?

What is it?

A bond loan is designed to help people who cannot afford to pay a full rental bond upfront. It can also be used by those who wish to free up cash for moving. Another problem they help is the lag time between when you receive your bond back and have to pay the new bond. Often you have to pay the new bond on the new property before you receive the bond on your previous property. With a bond loan you can fix this lag.

How does a bond loan work?

A bond loan works similar to other forms of personal loans. The money is generally given directly to you in order to pay your bond. You can choose to send the money straight to your agent’s trust account, landlord’s bank account, or the Rental Bond Board.

Some bond loans don’t have to be used for the bond and instead can be used for rent in advance or moving costs.

What eligibility criteria is required for a bond loan?

The eligibility requirements will vary from lender to lender. Often they will have income requirements such as earnings of more than $500 a week on an income not solely based on government benefits. Many will also assess your application based on income, ability to repay the loan, and your past credit history.

Most lenders will also require you to be over 18 years old, living in Australia, be employed, and have not declared bankruptcy in the past 12 months. Lenders will generally have more restrictions or higher costs.

What if things go wrong while I have a bond loan?

With bond loans, like any loan, there will be late fees, interest and other potential charges which you could be required to pay depending on the circumstances. If you are confident you can pay back the loan in reasonable time then choosing a bond loan can be a great option.

If you do encounter financial difficulties it is important that you speak to your lender. You may be able to work out new repayment options with them. If you are feeling worried about your money and debts it is a good idea to speak to a financial counsellor about your situation.


Bond loans can be a great solution if you need to move but don’t have the cash on hand for a bond. They are generally very simple loans allowing you to use the cash to secure the right property before the bond from your existing home is released.

If you have more questions regarding rental bonds have a chat with us, we can point you in the right direction for answers relevant to your personal situation.

Disclaimer: this should not be taken as personal financial advice. This is general information regarding bond loans. Your situation and experience may vary.

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