Personal loans for students are loans with more flexible credit criteria to allow for student situations like lower incomes, fewer assets or part-time working hours.
Student personal loans will typically come with lower borrowing amounts, and terms and repayments may be more strict.
Student personal loans can be used for any worthwhile purpose but should be avoided to cover small, everyday expenses.
What is a personal loan?
With a personal loan, you can borrow money to pay for personal expenses. You'll pay back the amount you borrowed, plus interest.
Personal loans are offered by a variety of lenders, including traditional lenders like banks, credit unions and building societies. They're also offered by online lenders. Personal loans come with loan terms, which is the time you have to repay the loan. They may also come with additional fees, like establishment fees and monthly account keeping fees.
What type of personal loans can I apply for as a student?
For personal loans for students, options include:
Secured personal loans. This type of personal loan requires attaching an asset, such as a car, as a guarantee for the loan. As a result, these loans generally come with lower interest rates than unsecured loans. The eligibility criteria are also more flexible.
Unsecured personal loans. With an unsecured loan, you can borrow money without needing an asset as loan security. These loans are more expensive than secured loans. But applications are shorter and approval times are faster.
Medical student loans. This loan is offered by a few lenders exclusively for medical and dental students. Qualifying students in their final year of study can use the loan funds to pay for their course, living expenses, debt consolidation or other purposes.
Graduate loans. If you're a final year student at university, you may be eligible for a loan with no repayments for the first year. This loan can be used to finance anything and can help cover expenses while you're looking for a job after uni.
Car loans. If you're looking to buy a car, students may be eligible for a car loan with a wide range of lenders. This is a secured loan. You will have to use the car as a guarantee on the loan, and receive lower rates and fees in return.
Interest-free loans. This loan is for low-income earners. It is offered by 170 local community organisations across 600 locations in Australia. You can borrow up to $1,500 to pay for bills and essentials, with terms ranging from 12 to 18 months. As the name implies, no interest is charged. You will only pay for what you borrow.
What alternatives are there to personal loans for students?
You may not need a personal loan for your expenses. Here are some other options:
Buy now pay later. You can make interest-free purchases and pay in instalments. Many retailers now offer this option, allowing you to break down your repayments into smaller, more manageable chunks. There are also buy now pay later services that let you pay your bills in instalments. Because repayment terms can be short, you should consider interest-free finance for larger purchases.
0% interest financing from retailers. Some retailers offer interest-free periods on the sale of their goods and appliances. For instance, The Good Guys offers up to 60 months interest-free on home appliance purchases with a minimum spend in-store or online.
What are the pros and cons of personal loans?
Pros
Can help you cover large, out-of-reach expenses, like the purchase of a laptop.
If you make all your repayments on time, your credit score will improve, making you eligible for further credit in the future.
Can alleviate financial stress in the short-term.
Cons
You're getting into a long-term debt contract.
You need some form of regular income to be able to pay for it.
Having to make regular payments can add to your stress.
If you don't make repayments on time or default, your credit score will take a hit.
What can I use a personal loan for?
A personal loan can be used for pretty much any legitimate purpose. Common reasons students take out personal loans include:
Laptops
A laptop is a basic necessity for pretty much every student, but unfortunately they don't come cheap. You can use a small personal loan to buy the laptop you need for your studies, or to upgrade your existing model.
General expenses
If you're in your last year of university, or you've recently graduated, you may need a personal loan to tide you over until you find a job. Luckily, there are personal loans for unemployed applicants available.
Course books/apprenticeship tools
Aside from just laptops, you may need to purchase various course books or supplies for your uni course. If you're doing an apprenticeship, there may also be tools of your trade that you need to acquire.
Cars
Most students are unlikely to be able to pay for the full cost of a vehicle upfront. Therefore, if you need wheels, a car loan could help. There are both secured and unsecured car loans available.
Which lenders offer personal loans for students?
We've listed lenders and benefits and discounts for students below:
Lender
Eligibility criteria
Benefits for students
Review the loan
ANZ
Be at least 18 years old
Earn at least $15,000 p.a.
Be an Australian citizen, permanent resident, or have a valid visa
Interest rate. This is how much the lender will charge you for the loan. The lower the interest rate, the lower your loan will cost. You can choose between fixed or variable interest rates. A fixed rate will stay the same for the life of the loan but variable rates can change.
Comparison rate. The comparison rate reflects something closer to the true cost of the loan. It takes into account both the interest rate and the various fees and charges.
Fees. These can include establishment and ongoing fees, and will add to the overall cost of your loan. Some lenders may waive them altogether, but in some cases it may be unavoidable. These fees are generally included in the comparison rate. But some fees, like fees for paying the loan early, may not. Even a loan with a very low interest rate can end up being expensive because of the fees.
Loan terms and repayment. This is how long you have to repay the loan. The longer the loan term, the cheaper your monthly repayments. But you'll be paying interest and fees during that time so you usually end up paying much more overall.
Loan amounts. Minimum and maximum loan amounts are set by lenders. How much you can borrow will depend on your income and credit score. It's important to check if the amount you need is within the range offered by the lender.
What else should I keep in mind when applying for a personal loan?
Beyond comparing loans to find the right product for you, there are more general things to consider.
How much can I afford? While you may need the loan funds, you need to be able to afford the loan. You need to take into consideration how much the loan will cost over its lifetime, and not merely your monthly repayments. Don't forget to include fees as well as interest rates in your calculations. Use a personal loan calculator to see how much repayments will be.
Does it fit my budget? After you calculate the cost of the loan, you need to ask yourself if you can afford it. You don't want to leave yourself out of pocket and ideally you'd still be left with a buffer for emergencies.
Can I repay the loan within the given loan term? If you fail to make your repayments, there may be high fines and even legal repercussions. If you've opted for a secured loan, the lender can also repossess your asset.
Is the loan competitive? You don't want to go for the first loan you come across. You should compare rates and fees to similar loan products and see how they fare. Check the interest rate as well as the fees and make sure the features meet your needs too.
Am I eligible for the loan? Check eligibility criteria before you apply to avoid being rejected and impacting your credit score.
What's the lender's reputation? If you're unsure of the lender, check if they're registered with ASIC. Look into how easy the lender is to contact. This is important in case there's an emergency and you need to contact them regarding repayments. If possible, you should also read third-party customer reviews of the lender.
Is the loan I'm applying for suitable for the loan purpose? If you want to purchase a laptop, you need to apply for a loan suitable for the purpose. Applying for a car loan won't be of much help as car loans come with restrictions. While personal loans can be used for a variety of purposes, there may be restrictions that limit how you can use the funds.
What are the risks of applying for a personal loan?
Long-term repercussions and legal issues. Once you sign a loan agreement, you're bound to its conditions. You will have to pay the loan and all the fees and payments. For short-term loans, you could be charged up to 200% of what you borrowed. For unsecured loans, the lender can initiate legal proceedings against you if you don't repay the loan. For secured loans, your asset can be repossessed by the lender. The lender can also report the debt to a credit reporting body like Equifax and use the services of a debt collector.
Multiple applications. Every loan application shows up on credit reports. Several applications within a short period can hurt your credit score. This can make it harder for you to get a loan in the future.
Getting into debt. Debt comes with responsibilities. If you can't meet your repayments, you should contact the lender as soon as you can. If you fail to do so, you may be charged late or default fees, which will lead to more debt. Your payment history will affect your credit score – for better or worse.
How do I know if I'm eligible for a personal loan?
Checking if you're eligible for a personal loan is relatively simple. Lenders should display their eligibility criteria clearly on their website, but you can always call them or use their e-chat to check.
Typically, lender criteria will include:
Age: You'll have to be above 18 years old.
Residency: You usually have to be an Australian citizen or permanent resident, but that's not always the case.
Employment: Some lenders require you to be in stable full-time employment. As a student you may need to find a lender that has more flexibility around this.
Income: It might not be enough just to know you can repay the loan, some lenders will have specific income criteria.
How can I improve my application?
To be in with the best chance of approval there are a few steps you can take:
If you want to apply for a personal loan with a bank, it can help to open a transaction account with them first. You'll need to do this a few months before you want to apply for a loan to give yourself time to establish a good transaction history with them.
Build your savings so you can show you're responsible with your money and have a good emergency buffer in case you struggle to make repayments.
Improve your credit score by paying any bills on time and closing down any other debts you might have.
Tuition fees and FEE-HELP loans
When you attend university or an approved higher education provider, you can get a FEE-HELP loan to pay all or part of your tuition fees. These loans do not cover costs like accommodation, laptops or textbooks.
To be eligible for a FEE-HELP loan, you must:
Be an Australian citizen and study at least part of your course in Australia
Be a New Zealand Special Category visa (SCV) holder or permanent humanitarian visa holder and meet the residency requirements. Permanent residents can only get FEE-HELP for approved bridging studies.
Have an available HELP balance
Be enrolled in a fee-paying place at a provider that offers FEE-HELP loans
Be enrolled in an eligible course at your provider by the census date (your provider can tell you if your course is eligible)
Submit the Request for FEE-HELP loan form to your provider by the census date
Compare lenders. Look at the fees, terms and eligibility criteria, and find a loan that suits you.
Once you've settled on a lender from the table above, click "Go to site" to visit the lender's website.
You can submit an online application. Keep all the documents required handy. This will speed up the process.
Frequently Asked Questions
If you never earn enough to meet the HECS-HELP repayment threshold, then you're not required to make any repayments, ever. The debt remains with you but does not attract interest – only indexation to keep up with inflation. The debt will only be recovered if your income later exceeds the threshold, or it will be written off if you pass away.
Yes, students in Australia can get loans through various options, including government-backed HECS-HELP loans for tuition fees and personal loans for living expenses. Some banks and financial institutions also offer specific student loans, which can help cover costs such as textbooks, laptops and other study-related expenses.
The amount of student loans in Australia varies depending on the course and institution. For HECS-HELP loans, students can borrow up to the full cost of their tuition fees, up to a limit of around $120,000. Personal loans for students typically range from $2,000 to $50,000, depending on the lender and the borrower's financial situation.
Students on a visa in Australia may face challenges in securing a loan, as many lenders require permanent residency. However, some banks and financial institutions may offer loans to international students if they have a stable income or a local guarantor.
Yes, an 18-year-old can get a loan in Australia, provided they meet the lender's criteria, which typically includes having a stable income, good credit history and being an Australian citizen or permanent resident. Options for younger borrowers may include personal loans, student loans or low-limit credit cards.
Yes, permanent residents in Australia are eligible for government-backed student loans like HECS-HELP and FEE-HELP, which cover tuition fees. They can also apply for personal loans to cover additional expenses such as textbooks and living costs. Eligibility requirements vary, so it is important to check specific loan terms.
Sources
Why compare personal loans with Finder?
Addicted to details. We know taking out a personal loan is something you'll be hooked up with for a while. That's why we put hours into research for this guide (and still do at least once a month)
Rates obsessed. Lenders come in all shapes and sizes, that's why we don't just track the big banks, but all the digi folk too. Pretty much everyone but your parents to be honest.
Cash for whatever you need. Lending rates verified from 180+ products day and night. Whether you're buying a car, rennovating your home or heck just ready to let loose with the spending - we got you.
Matt Corke is Finder’s head of publishing ventures. Prior to this he was head of publishing for Australia, New Zealand and emerging markets. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time, he has survived the dot-com crash and countless Google algorithm updates.
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Bria Horne was a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication.
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If you're wanting to bolster your application, buy an asset with your partner or apply for a loan you're not eligible for by yourself, you can consider a joint application personal loan.
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Addicted to details. We know taking out a personal loan is something you'll be hooked up with for a while. That's why we put hours into research for this guide (and still do at least once a month)
Rates obsessed. Lenders come in all shapes and sizes, that's why we don't just track the big banks, but all the digi folk too. Pretty much everyone but your parents to be honest. 
Cash for whatever you need. Lending rates verified from 180+ products day and night. Whether you're buying a car, rennovating your home or heck just ready to let loose with the spending - we got you.