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In Australia, when you need to cater for certain expenses but don’t have the financial capability to do so, loans are usually a way out.
Lenders in Australia offer numerous types of loans that borrowers can apply for and use for their desired purpose.
As one of the types of loans offered by Australian lenders, one of the many features that set personal loans apart is the fact that they can be used for any purpose intended by the borrower.
Unlike auto loans which are meant for purchasing a vehicle or mortgage loans which are meant for purchasing a home, the use of personal loans is not limited, which is what makes it one of the most popular loans in Australia.
A personal loan allows you to borrow money for any purpose, use it, and then lay it back at a later date with interest.
Most lenders usually don’t require collateral to grant you a personal loan, so the risk of losing your asset to a lender is significantly reduced.
Personal loans often come in different forms depending on the lender, and to help you navigate the world of personal loans efficiently, we’ve compiled some pertinent information which includes a list of personal loans in Australia to get approved in 2023, how to apply for them, who the top lenders are, how to be eligible, and more.
What are personal loans?
Personal loans are a type of instalment loan that are taken for a variety of purposes. Unlike some types of loans that are granted by lenders for a specific purpose, personal loans can be used for any project that the borrower desires. You can use them for wedding expenses, medical bills, or to pay off outstanding debts.
Personal loans are usually unsecured, meaning you can apply for them without putting down collateral. The lender basically checks your credit score, credit history, income, and debts to determine if you will be eligible for the loan.
After getting a personal loan, you are required to make fixed monthly payments with interest until you complete repayment.
A good credit score fetches you a personal loan with a low interest rate while a poor one gets you one with a high interest rate.
You can get a personal loan at banks, credit unions, and online lenders.
Requirements for a personal loan
1. Proof of stable employment: To apply for a personal loan, you will need to provide proof of a job where you earn a steady income. This is to assure the lender that you have a way to earn the money needed to repay the loan.
2. Account information: The lender will also request for your bank account information i.e. the account where the loan will be deposited.
3. Personal information: Also, you will need to provide some personal information such as:
- Your full name.
- Your date of birth.
- Your residential address.
- Your email address and phone number.
- The amount you want to borrow.
- Your social security number.
- Your passport.
- Some utility bills.
- Your driver’s license.
4. Credit score: Before granting you a personal loan, a lender would typically peruse your credit score and your credit history to determine how you handle bills and debts. While preparing to apply, you should take a look for yourself so you will know what the lender would see when they do a credit check. A good credit score gets you a personal loan with a low-interest rate and vice versa.
Eligibility Requirements for Personal Loans in Australia
- To qualify for a personal loan in Australia, you must:
- Be at least 18 years of age.
- Live in Australia
- Be a citizen of Australia or a permanent resident.
- Meet minimum income requirements.
- Have a steady source of income.
- Have good credit.
Upsides of a Personal Loan
1. Flexible Use: One of the great features of personal loans is that you can use them for a variety of purposes.
2. Fixed interest rates: Personal loans often come with fixed interest rates, which is an upside because your monthly payments are defined and static. This way, you never have to worry about a payment increase.
3. Rapid access to funds: The application process for personal loans is usually simple and straightforward, so approval of funds is usually quick.
4. No collateral needed: Most lenders of personal loans don’t require a borrower to put down collateral.
How to Apply for a Personal Loan in Australia
1. Assess your credit score: After deciding that a personal is what you need to resolve your financial troubles, the first thing to do before submitting an application is to check your credit score to see what it looks like.
Having a good credit score will improve your chances of getting a personal loan with the best rate and terms, so be sure to go through your credit reports to ensure that all is right, and if your score is low, try to improve it before applying.
2. Pay off outstanding debts: If you have the capability, try to pay off some of your existing debts, as a lower debt-to-income ratio can improve your chances of getting a personal loan with favourable terms.
3. Compare lenders: The next step is to get loan quotes from multiple lenders to see the types of loan packages that you qualify for or even if you qualify for anyone at all. Some lenders offer pre-qualification, which is a process whereby the lender asks you for certain credit and financial details to determine what kind of loan you qualify for based on that information.
Using this option, you can easily eliminate lenders who are unlikely to grant you a personal loan and focus on the ones who might.
4. Submit an application: After comparing and deciding on a lender, the next step is to submit an application and some necessary financial information such as proof of employment, bank statements, account information, and so on.
5. Get the loan: If the lender approves your application, you should receive the money in a matter of days.
List Of Personal Loans In Australia To Get Approved In 2024
In Australia, there are different types of personal loans that lenders provide, as such, it is up to you as a borrower to determine which type you are interested in taking. To make the process smoother for you, we have compiled a list of some personal loans that you can get in Australia.
Debt Consolidation Loans
This is a type of personal loan that turns multiple loan debts into one single loan so you can focus all your financial resources on making one monthly payment.
To eliminate the stress of paying off multiple loans at the same time, you can always get a debt consolidation loan which you can use to clear all your existing debts and concentrate all your financial resources on settling the new and only debt.
This is a type of personal loan that that requires you to provide someone, usually a family member, who will guarantee the loan on your behalf, and automatically assume responsibility for the repayment of the loan of you fail to make payment.
Personal Line Of Credit
This is a financing option that lets you take money whenever you need it, up to a particular amount which is set as the limit. It usually works like a credit card, which means you won’t be given a lump sum, instead, you will be allowed to dip into the credit whenever you need to use money.
This is a financing option that banks offer to help cover the difference between the amount you have in your checking or savings account and the amount needed for your transaction. This is the bank’s way of giving you credit when you no longer have sufficient funds or even any funds at all in your bank account.
The credit gives you the grace to continue taking money from the account even when the balance has gotten to zero. An overdraft fee is usually charged in addition to the amount that you’ve borrowed, along with interest.
These are short-term personal loans that can you can quickly get to solve emergency financial needs. They are called payday loans because both the repayment date and the amount you can borrow are usually based on the amount you earn and when you will receive it. They are short-term forms of credit mostly for people who are unable to get a conventional loan as a result of a poor credit score
This is the type of personal loan that pawn brokers provide in exchange for an asset such as a TV, a laptop or jewelry. How it works is that a borrower will drop their property in exchange for funds, which they will then get back after the loan is repaid in full.
Common Uses Of A Personal Loan
1. Debt consolidation: Personal loans are sometimes taken for the sole purpose of consolidating debts. You can take a personal loan to settle all your existing debts and then owe money to a single lender.
2. Moving costs: You can use the money obtained from personal loans to move your household belongings to a new place. You can use personal loans to settle transportation expenses, buy new furniture, and more.
3. Emergency expenses: Personal loans are also used to cover emergency expenses such as medical bills that are not covered by your medical insurance. It could be a medical procedure or an emergency surgery.
4. Big purchases: When you have to take care of expensive automotive repairs or buy big personal items but the funds needed is not available at the moment, you can always get a personal loan to cover these expenses and then deal with repayment at a later date.
5. Home renovations: Home renovations can sometimes cost a lot, and as a homeowner who doesn’t have enough equity in your home to get an equity loan, you can always take a personal and use the funds to take care of it.
6. Wedding expenses: Another use of personal loans is to cater for big-ticket items like the wedding venue, bride’s dress, photography, wedding cake and so on.
Best personal loan lenders in Australia
Now Finance Secured Personal Loan
As one of the most trusted lenders in Australia, Now Finance Secured Personal Loan offers personal loans that range from $5,000 and $50,000 to borrowers with impressive credit. They don’t charge upfront application or ongoing fees and there is a maximum loan term of 7 years if you are borrowing more than $8,000.
- You can get up to $50,000 without putting down a collateral.
- They usually charge fixed interest rates that begin from 6.75% per annum.
Harmoney Unsecured Personal Loan
This is a wonderful online lender that offers personal loans ranging from $2,000 to $70,000 using a simplified online application process. The interest on their loans are usually fixed and low if one has a good credit.
- You need to earn above $30,000 annually to qualify.
- There is a $275 – $575 establishment fee.
Heritage Bank Standard Personal Loan (Unsecured)
Offering personal loans of between $5,000 and $50,000 with a fixed interest rate of 8.99% per annum, this fantastic lender allows you to make your repayments weekly, fortnightly or monthly. It is easy to get an unsecured personal loan from Heritage Bank Standard Personal Loan, especially when you have good credit.
- They charge a $200 application fee.
- There is a redraw facility.
- You have to pay a $5 monthly service fee.
Our Money Market Low Rate Personal Loan
Here, you can get personal loans from $2,001 to $75,000 with an interest rate of 6.57% per annum. The loan term is usually between 1 to 7 years and you will have to pay $25 establishment fee.
- No monthly fees.
- Access to a free redraw.
When in dire need of a loan to solve one financial emergency or the other, personal loans are usually a great option due to their versatile nature.