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A personal loan can give you access to extra money to pay for something bigger than your everyday purchases, it could be for a car, a wedding, a holiday, or even some home renovations.
No matter what you plan to take a personal loan out for, what you'll want to look for in a personal loan is the same. You'll want a loan that you can afford to pay back, with a competitive interest rate and over a time frame that allows you to make the payments without falling behind.
Are you ready to compare personal loans?
Personal Loan Finder® can help you find the right personal loan for you.In a nutshell, a personal loan is a lump-sum payment or line of credit between $2,000 and $100,000 that you repay over a period of up to seven years.
Personal loans are used for a variety of things but generally people tend to take them out for those one off more expensive purchases like a car, paying for a wedding or doing renovations. However a personal loan can be useful if you need to consolidate existing debt you have elsewhere which can help you save on fees and multiple interest rates.
Like most loans, when you repay a personal loan you are charged interest on top of the loan, which is a percentage of the original amount (often called 'the principal' in bank speak) that you asked to borrow in the first place. The interest rate is set by the bank or institution that is doing the actual lending of the money to you.
Interest rates come in two forms, the standard interest rate (often called the advertised rate) and then there is what's called the comparison rate.
The personal loan process is quite straightforward and it generally goes like this:
There are quite a few personal loans available in Australia. Being approved for a personal loan will depend on your income, employment situation, what you're taking out the loan for, how much you can afford to repay and how good your credit history is.
It might sound a bit obvious, but you do need to make sure that the personal loan you choose is the very best one that is going to suit your finances and your ability to pay the loan back. Afterall, you don't want to pay more money than you need, or worse impact your credit score by taking on a loan you cannot realistically pay back in the time allocated. To figure this out, we'll explain how personal loans work and what are the types of loans available so choosing one should be a snap.
While the interest rate is usually the magic number that grabs the headlines when looking at a loan, it's actually the comparison rate that is a much more useful number to look for, and it's one that will give you the best information about what you can expect to pay.
So what's so special about the comparison rate and how does it differ to the interest rate? The big difference is that the comparison rate is going to give you a much clearer idea of what you are up for in terms of overall costs. what you are really going to be up for in terms of costs - from the actual interest rate plus if this particular loan also comes with other fees that you might not have considered.
Imagine you are looking at an interest rate of 12.45% - this sounds good to you until you then take a look at the loan's comparison rate which is 14.52%. Why the difference? Because this particular loan comes with additional fees. On the other hand if you see a loan with an interest rate of 10.13% p.a and the comparison rate is also 10.13% then you'll know there are no extra fees and charges that will be added on top of the interest rate.
Comparison rates may be calculated differently depending on the loan. However, if they are provided, it needs to be disclosed how they are calculated. For example, it may be calculated on a personal loan of $30,000 over 5 years.
A comparison rate must be displayed alongside the interest rate by all lenders. If you're looking at the Finder comparison tables, you will be able to see a column labelled "comparison rate" for each loan. By scrolling over this rate you can see how it's calculated.
Quick tip: different loan amounts and loan terms can result in different comparison rates.
Absolutely! Interest rates are still an important part of your personal loan. For example, your outstanding balance will be charged interest calculated using the interest rate, not the comparison rate. It's vital that you know what the rate is and whether it's competitive. While comparison rates are there to give you a comprehensive overall idea of what you are in for financially with the loan. The interest rate is what you will be charged during your loan term (minus fees of course).
It's worth mentioning that the interest rate a lender advertises can be different from the interest rate you actually end up paying. During the application process lenders will factor in things like your credit score, the amount your borrowing, any existing debts you might have plus how much you earn when deciding your rate.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1000 articles on Finder to help our readers strengthen their financial literacy.
"One of the biggest mistakes people make is assuming the lowest available rates are the rates they will get. In many cases, the lowest rates are only available on specific loan amounts and terms. That's why it's helpful to prequalify with a few lenders to get an idea of the kinds of rates and terms you're eligible for."
If you plan to take out a loan, you want to know you've taken out the best one available for you. So what should you look for?
Rates on personal loans will be either fixed or variable. so make sure you are comparing apples with apples across similar loans to make sure you're getting the best deal. If the loan is risk-based, you'll receive a rate based on your credit history and your general risk profile. Applying for credit too much over a short period of time can affect your credit score so you'll want to make sure you have a good chance of being approved before you do. You can use the free Finder app to see your chance of approval for a personal loan without it affecting your credit score. You can download the app here in a few seconds.
You'll need to consider both ongoing fees and the fees that are charged when your loan starts. Common fees include an application fee, exit fee or loan set-up fee, while monthly fees and annual fees are common ongoing fees. You might also be charged to use additional features of the loan so check out those too or ask the lender before you go ahead. A great idea is to keep an eye out to see if you're eligible for cost savings such as fee waivers that can help reduce the cost of the loan, every little bit counts.
How often are you able to make repayments? Are you able to make additional repayments or pay off the loan early without penalty? Is there a redraw facility if you do make early repayments? Some loans are inflexible in their terms and how repayments are made so if you need that flex - check it's possible with the loan you are interested in.
Personal loans are usually offered for terms of between one and seven years, with other loans on offer for shorter time periods. Some lenders are more restrictive than others when it comes to how long you have to repay your loan – for instance, only offering terms of one, three or five years. Make sure the loan terms on offer are what you need. Long term loans over seven years might offer lower repayments but you'll be paying a more interest over that period of time.
To get an estimate of your borrowing power, you can put your loan amounts into the personal loan calculator in the comparison tables above and you'll see what monthly repayments will approximately be.
Tip: This also can be a good time to see how the repayments will fit into your budget plus help you determine if you can afford to make extra repayments to pay off the debt faster.
Eligibility for personal loans depends on a few different things:
Each bank and institution have their own criteria that you will have to meet to finalise your loan application.
💵 Work out how much you need to borrow.
🔓 Choose a secured or unsecured loan.
📅 Decide between a fixed or variable rate.
📝 Choose your terms.
🔎 Start your personal loan research and comparison.
📱 Click through and apply.
There is no way to guarantee you're approved for a loan, but giving yourself the best chance at being approved starts with meeting the eligibility criteria set by the lender. Here are some top tips.
Still have questions? We've done our best to answer the most common questions people have when taking out a personal loan.
Different lenders can have your loan amount transferred to you within different amounts of time. Some banks are able to offer existing customers same-day personal loans, and some payday lenders can have loan amounts transferred to new customers within an hour of approval. If you are in need of the cash as soon as possible it is advisable to check to see how long it will take to receive your loan amount before you apply.
The average interest rate depends largely on what type of loan you're applying for. If you get an unsecured loan the average interest rate is around 12-14% p.a. while a secured personal loan is between 8-12% p.a. If you opt for a peer-to-peer or risk-based lender the interest rate you receive will depend on your perceived risk.
Secured loans, as the name suggests, means that you offer something of value as security on the loan. If you don't pay you may find the bank will repossess your car and sell it.
If you are having trouble repaying your loan you'll need to get in contact with your lender. They may be able to organise a payment plan with you, or be able to offer you some sort of option to help you manage your repayments. You also have the option of getting in touch with a free financial counsellor on 1800 007 007 to help you organise a budget.
The answer to this question depends on what type of loan you are getting. If you are getting a secured car loan then all details of the car and finance agreement and registration must be given to the bank or lender before you receive the money. However, if you are getting an unsecured personal loan, then you only need to give a general idea of the loan purpose to the bank. If you are consolidating debts then you'll have to give details of your other loans and credits to the institution.
If you've been approved for a home loan that falls short of your chosen property's valuation you may be considering if it's worth it to apply for a personal loan. Personal loans might also be on the table to cover LMI. While this is an option, you need to consider if you will be approved for your personal loan (consider the home loan you've been approved for) and whether you can afford the repayments on top of what you'll be paying towards your mortgage.
Credit unions are different to banks in that they operate in a not-for-profit business model. Typically you will find there are not as many fees or charges with a credit union loan which means the interest rate could be lower. Credit Unions are governed by the same regulations as banks so it's just as safe to apply for a credit union personal loan.
If you have a variable rate personal loan, then you may notice that your interest rate may go up or down. This could happen due to a range of factors but it mainly based on what the Reserve Bank of Australia dictates the official cash rate is. If you've found your rates have gone up, it may be a good time to consider refinancing your personal loan.
If you have bad credit and are worried that you may not get a loan from a bank or credit union, you may see ads for personal loans on Gumtree and want to apply. As with any form of finance you should always do your due diligence before applying. You should always check for an Australian Credit Licence and research the lender thoroughly. Alternatively, you could consider a no credit check personal loan lender.
Whilst a short term loan, also known as a payday loan is a type of personal loan, there are a range of differences that make this type of lending completely different. Personal loans are generally taken out over one to seven years, whereas a payday is between 16 days and one year. Payday loans are also for smaller amounts – between $100 and $5,000 – and are available to those with bad credit.
Personal loans can vary greatly in size from $1,000 and upwards of $80,000. If you're purchasing an asset such as a car keep in mind you may need funds to cover insurance. Many banks and lenders will consider up to $20,000 and $30,000 to be a medium sized loan. If you are only going to borrow between $10,000 and $20,000 then a small personal loan may suit your needs better.
Many lenders offer loan protection insurance as an add-on to your personal loan. This insurance can pay the minimum repayments on your personal loan if you lose your job, or cannot work because of illness or injury. You usually apply for the insurance when you are approved for the loan but you may be able to get the insurance further into the loan term.
Once you've actually successfully applied and received your funds, it's important to keep your loan up to date. If you've applied for a loan with the bank your everyday account is with, then you will probably have automatic direct debit setup. If your loan is with a separate institution then it is a good idea to set up an automatic transfer via internet banking a few days before your due date to allow for processing times. You'll be able to check your balance, interest rate, repayment dates and schedules. You should login to your loan account regularly to check notifications and payments details. If you want to make additional payments then you could do this by internet transfers, BPAY or if your bank allows it – over the counter deposits. If you miss a payment due to insufficient funds then it is important to call the bank and attempt to rectify the situation as soon as possible
Yes, personal loans can help with your business needs too. You can access personal financing to help cover business needs — everything from trucks to equipment can be purchased or even leased with a personal loan. The same is true even if you have bad credit. Business vehicles including company cars, trucks or vans can all be financed with a personal loan. If your business requires specific equipment to purchase or lease, such as forklifts, earthmoving equipment, workshop machinery, or even office equipment, you can take out a personal loan to help cover the costs. You won't have to hurt your business' cash flow to make the purchase.
Pepper Money is an Aussie non-bank lender that offers a vast range of personal loans and home loans to customers Australia-wide. Find out more here.
Find out more about Handypay's personal loans for home improvements. Personalised rates start from 6.75% p.a. on terms from 1 to 7 years.
The Citibank Ready Credit unsecured revolving line of credit is available with a 3-year introductory rate of 5.9% p.a. on balance transfers.
Find out more about Pepper Money's no fee personal loan and benefit from a competitive rate from 6.95% p.a., zero fees and loan terms of up to 7 years.
Looking to renovate your home? Find out more about Brighte's personal loan for home improvements and ways in which it may be able to benefit you.
Get rewarded for an excellent credit score with a Now Finance personalised rate secured personal loan. Rates vary between 4.45% p.a. and 15.45% p.a. Apply today.
Alex is a neobank lender specialising in personalised rate personal loans. Find out more about Alex's personal loans and what fees and features are involved.
nmoni is an Australian lender that offers personal loans to both good and bad credit applicants. Find out more about nmoni's rates, fees and features.
Becoming more energy efficient has a multitude of benefits for both the environment and your wallet. An added bonus is, you might be able to get a low-rate loan to help you. Find out more about Plenti's green loan here.
Looking for a competitive rate? Plenti offers loans funded by investors with rates that are tailored to your personal circumstances.
I am currently in the divorce process and about to start the parenting order and property settlement on court. However, my wife controlled all our property including money, car, house and businesses, and she made up a story to successfully applied an interventional order against me, kicked me out of home and refused to provide anything even just for basic living requirements.
The total assets need settlement worth about $2 million dollars, my lawyer Mr Byron Leong from Lander & Rogers Lawyers estimated that my legal cost would be around $40k, Mr Leong was also very confident that in the least favorable scenario I will get 30%, which is about $600k in the settlement. However, I was prevented to access any funding by my wife, and therefore I wanted to apply for a loan to cover my legal cost and living expenses during the legal process, roughly $50k, which is way less than the amount that I can get from the property settlement.
In order to make my application competitive, my lawyer can provide his professional opinion on my case, his senior background and the firm’s outstanding reputation is persuasive, along with my agreement to repay the loan before I can get any money after the settlement. Moreover, my first concern is the custody of my daughter rather than property, therefore I can accept relatively high interest and any other reasonable cost, any of your help will be very appreciated.
Hi Guo,
Thanks for getting touch! I’m sorry to hear about your situation. I understand that you are in a difficult place right now. It’s helpful to know that Finder doesn’t make assessments and only the providers on the page (when contacted) can proceed with your application. Please see above the available providers listed. As a friendly reminder, review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.
Hope this was helpful. Don’t hesitate to message us back if you have more questions.
Best,
Nikki
My husband and I are in our late 50’s we want to borrow $30k to consolidate some loans and to get some work done to our car and house. Do you think our age will prevent us from getting a loan? We don’t intend to retire for another 5 years.
Hi Shelley,
Thank you for reaching out to finder.
There is no maximum age for taking out a personal loan. But you may want to consider how to improve your chances of the loan being approved.
Establish your borrowing capacity. What repayments can you afford? Lenders will use a variety of criteria to decide how much you’re eligible to borrow, but you need to know how much you can afford to repay.
Building a good banking history. Keep your account in good standing to build a positive relationship with your bank, even if you don’t plan on borrowing from them.
Keep your credit rating in good standing. Make sure you keep track of all your payments, from credit cards to utility bills, because any arrears, debts, or missed payments will affect your ability to access credit.
Keep track of your saving goals. If you manage to contribute to your savings regularly, it shows lenders that you are likely to manage ongoing loan repayments.
Hope this helps!
Cheers,
Reggie
Help me get cash fast??
Hi Elika,
Thank you for leaving a question.
I understand your situation in needing cash fast. You are on the correct page to make a selection on where you could apply for a personal loan. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!
Cheers,
Reggie
If I apply for a personal loan and it is declined does this affect my credit rating?
Hi Martin,
Thank you for getting in touch with finder.
Declined application will not affect your credit rating. However, every time you make an application for credit it’s listed on your credit file as a “credit enquiry”. It will be listed regardless of whether the application is approved or not.
You may know more about credit enquiries by going through this PAGE. On that page, you’d learn how long do credit enquiries remain on your credit file, how do credit enquiries look like on your credit report and other related pages on credit file/report.
I hope this helps.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
please a friend of mine introduced me to this lender jacksonbenloanfirm@outlook .com and i tried them and got a loan of 45,000$ but i still need more for a project am working on i don’t know if it right to ask them for more?
Hi Marie,
Thanks for leaving a question on our page.
Please know that we’re a product comparison website and we don’t stand as a representation to any individual or any company featured on our site.
You can browse through the personal loan options we have above.
If you need to increase your loan amount, all you need to do is ask them to give you an increase in your loan amount. Goodluck!
Hope this was helpful. Don’t hesitate to message us back if you have more questions.
Cheers,
Nikki
I recently applied for a 26k personal loan and was rejected. Not because of my credit rating but because My credit card was maxed out at 4500 and my bank statements showed I was spending all of my pay (on unnecessary things) every week
I want to re apply for a personal loan again through another bank. My aim is to allocate 600 a week on building savings and paying off the card, for 8 weeks before I apply. But I dont know if it would be best to show a record of savings on my bank statement or show I have a lower debt on my credit card. What has a bigger impact on the lenders?
Hi Henry,
Thanks for your inquiry. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.
There are a few different ways you can pay down credit card debt. You could continue making repayments on your current credit card or you could apply for a new product to save interest, such as a personal loan or a balance transfer credit card.
You can get helpful information on these pages and compare your options for loans:
https://www.finder.com.au/personal-loan-credit-card-debt
https://www.finder.com.au/personal-loans/debt-consolidation
Before applying for any loan, please ensure that you meet the eligibility criteria and requirements of the loan option or lender and make sure to read the details, as well as the relevant PDS/ T&Cs of the loan option before making a decision and consider whether the product or option is right for you.
Best regards,
Rench
Hi My partners house settlement is going through but could take a year to get his money. He has a bad credit record due to his ex wife. He has changed jobs a week ago to a part time job so no payslips. We need $10K for a partner visa in a few weeks time otherwise we have to give up our lives and move to the UK. I am unable to work on my Visa but when I apply for the visa I have a job lined up so I can pay a repayment of $1000 a month. He knows his ex wife won’t agree to any loan against the house. Can you recommend a loan please ?
Many Many thanks
Hello Jacci,
Thank you for your query.
The lenders listed on these pages might be able to consider you for a loan.
Low Doc Personal Loans
Personal loans for casual and part-time employees
Personal loans for temporary residents
You can click the link that is more applicable to you to find the right lender for you. On the page is a comparison table you can use to see which loan suits you. Once you have chosen a particular lender, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with your loan application or get in touch with their representatives for further assistance.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Hope this helps.
Cheers,
Gru
I need a personal loan of$26,000 lm on a carers pension and I am 65years old and I have very good credit how much a month would l have to pay and I be able to get the loan and who would be good to get the loan from.
Hi Liz,
Thanks for your question.
Please note that we are a financial comparison and information service. We are unable to make recommendations to our users.
If you are on a pension, the lenders on this page may consider you for a loan. Once you have selected a particular lender, please click on its name to view its review page. From there, you can check the loan products that are available to you including their feature and eligibility criteria to apply.
The monthly repayment will depend on your interest rate and loan term.
Cheers,
Anndy
$16,000 unsecured loan.
Is there a cooling off period or 1 – 2 days?
hi Julie,
This depends on the lender you apply with. Lenders usually do not offer cooling off periods but you can find some lenders, for example car lenders, that offer a 30-day back guarantee with your loan. For example, RACQ offers a 21-day guarantee on its loans.
You’ll need to confirm with the lender you’re applying with to see if such an agreement exists.
Hope this helps,
Elizabeth
I own a house divided into 2 flats with an income from one of $330 per week . can I get a line of credit and if so how much.
Thank you
Hi Rene,
Thanks for your comment. Each lender will set out their criteria separately and it’s always important to make sure you meet the eligibility before apply.
You can check out a comparison of line of credit loans here.
I hope this has helped.
Cheers
Matt