Whether you’re planning a wedding, dreaming of a holiday or looking to consolidate debt, we can all use a helping hand every now and then. Learn about how personal loans work in Australia, who is eligible and how the new Australian credit reporting system will affect you.  

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8.50%

Fixed

9.36%

Wisr

$947

36 months

3 years

3.61

/ 5
More details

5.75%

Variable up to 9.99%

6.47%

Symple Loans

$909

36 months

1 year to 7 years

4.33

/ 5
More details

9.99%

Fixed

11.22%

Latitude Financial Services

$968

36 months

2 years to 7 years

3.25

/ 5
More details

7.45%

Fixed up to 16.95%

9.07%

Now Finance

$932

36 months

1.5 years to 7 years

3.64

/ 5
More details

6.99%

Fixed up to 9.49%

6.99%

SocietyOne

$926

36 months

2 years to 3 years

4.14

/ 5
More details

7.99%

Fixed

8.35%

People's Choice Credit Union

$940

36 months

1 year to 10 years

3.99

/ 5
More details

12.45%

Fixed

13.32%

ANZ

$1003

36 months

1 year to 7 years

3.01

/ 5
More details

7.65%

Fixed up to 10.49%

7.65%

Liberty Financial

$935

36 months

3 years to 7 years

4.04

/ 5
More details

12.69%

Variable

13.56%

NAB

$1006

36 months

1 year to 7 years

3.12

/ 5
More details

15.99%

Variable

16.84%

ANZ

$1055

36 months

1 year to 7 years

2.64

/ 5
More details

4.94%

Variable

7.41%

Heritage Bank

$898

36 months

1 year to 10 years

4.56

/ 5
More details

5.60%

Variable

5.70%

Family First Credit Union

$907

36 months

0 year to 10 years

4.49

/ 5
More details

5.85%

Variable

6.70%

Holiday Coast Credit Union

$911

36 months

0 year to 10 years

4.20

/ 5
More details

6.49%

Fixed up to 8.79%

6.84%*

Plenti

$919

36 months

3 years to 5 years

4.25

/ 5
More details

7.79%

Fixed up to 10.49%

8.35%*

Plenti

$937

36 months

3 years to 5 years

3.96

/ 5
More details

8.00%

Fixed

8.21%

Our Money Market

$940

36 months

1 year to 7 years

3.77

/ 5
More details

8.99%

Fixed

9.13%

ING

$954

36 months

2 years to 5 years

3.67

/ 5
More details

9.00%

Variable

9.28%

Holiday Coast Credit Union

$954

36 months

0 year to 5 years

3.83

/ 5
More details

6.99%

Fixed up to 29.99%

7.69%

Harmoney

$926

36 months

3 years

3.95

/ 5
More details

10.89%

Variable

11.15%

CUA

$981

36 months

0.08333333333333333 year to 7 years

3.45

/ 5
More details

10.99%

Fixed

12.21%

Latitude Financial Services

$982

36 months

2 years to 7 years

3.08

/ 5
More details

11.50%

Fixed

12.38%

Wisr

$989

36 months

3 years

3.09

/ 5
More details

12.69%

Fixed

13.56%

NAB

$1006

36 months

1 year to 7 years

3.05

/ 5
More details

12.99%

Fixed

14.14%

Westpac

$1011

36 months

1 year to 7 years

2.81

/ 5
More details

12.99%

Fixed up to 28.99%

14.20%

Latitude Financial Services

$1011

36 months

2 years to 7 years

2.86

/ 5
More details

13.99%

Fixed up to 29.99%

15.19%

Latitude Financial Services

$1025

36 months

2 years to 7 years

2.69

/ 5
More details

14.00%

Variable

14.30%

Holiday Coast Credit Union

$1025

36 months

0 year to 5 years

2.96

/ 5
More details

11.89%

Variable

12.15%

CUA

$995

36 months

0 year to 7 years

3.25

/ 5
More details

4.24%

Variable

4.44%

Endeavour Mutual Bank

$889

36 months

0 year to 10 years

4.85

/ 5
More details

4.93%

Variable

5.20%

Community First Credit Union

$898

36 months

0 year to 10 years

4.53

/ 5
More details

4.99%

Variable

5.23%

First Option Bank Ltd

$899

36 months

0.08333333333333333 year to 7 years

4.65

/ 5
More details

4.99%

Variable

11.75%

Coastline Credit Union

$899

36 months

1 year to 7 years

4.66

/ 5
More details

4.99%

Variable

6.34%

Coastline Credit Union

$899

36 months

1 year to 7 years

4.66

/ 5
More details

5.29%

Variable

5.50%

Bank First

$903

36 months

0 year to 9 years

4.60

/ 5
More details

5.29%

Variable

5.50%

Bank First

$903

36 months

0 year to 9 years

4.60

/ 5
More details

5.31%

Variable

5.59%

Bank of us

$903

36 months

0.5 year to 10 years

4.50

/ 5
More details

5.60%

Variable up to 5.74%

5.60%

Family First Credit Union

$907

36 months

0 year to 10 years

4.50

/ 5
More details

5.69%

Fixed

5.69%

Police Credit Union

$908

36 months

0 year to 5 years

4.54

/ 5
More details

5.17%

Variable

5.77%

Summerland Credit Union

$901

36 months

0 year to 7 years

4.46

/ 5
More details

5.25%

Variable

5.89%

Catalyst Money

$902

36 months

1 year to 5 years

4.49

/ 5
More details

5.95%

Fixed

5.95%

Hume Bank

$912

36 months

1 year to 5 years

4.54

/ 5
More details

4.74%

Fixed

4.74%

Holiday Coast Credit Union

$896

36 months

1 year to 5 years

4.75

/ 5
More details

5.85%

Variable

6.32%

Holiday Coast Credit Union

$911

36 months

1 year to 10 years

4.47

/ 5
More details

5.99%

Variable

6.26%

Community First Credit Union

$913

36 months

1 year to 10 years

4.40

/ 5
More details

5.99%

Variable

6.26%

Community First Credit Union

$913

36 months

1 year to 10 years

4.40

/ 5
More details

5.99%

Fixed

6.26%

Credit Union SA

$913

36 months

1 year to 7 years

4.42

/ 5
More details

5.99%

Variable up to 7.99%

6.26%

Community First Credit Union

$913

36 months

1 year to 10 years

4.40

/ 5
More details

5.99%

Variable

5.99%

Police Credit Union

$913

36 months

0 year to 7 years

4.30

/ 5
More details

5.90%

Fixed

6.50%

Auswide Bank

$911

36 months

0 year to 7 years

4.08

/ 5
More details

6.29%

Variable

6.50%

Horizon Credit Union

$917

36 months

0 year to 10 years

4.46

/ 5
More details

Learn more about personal loans

How do Australian personal loans work? 

Taking out a personal loan in Australia works by allowing you to borrow money for a specific purpose over a set period of time. Personal loans work as most loans would and there are certain criteria that you have to meet, including having income to repay the debt.  
 
Key components of an Australian personal loan: 

Personal loan Element  About
Loan amount  Can start from $2,000 and some go up to $100,000 depending on its purpose. Smaller loans, called payday loans, are available but carry their own risks.  
Interest rate  The cost of borrowing the money which is charged as a percentage of the loan amount and applied to your regular repayments. Interest rates can be fixed or variable.  
Loan term  The length of your loan, typically 12 to 60 months.  
Loan type  Choose between a secured or unsecured loan.  
Repayment frequency  Weekly, fortnightly or monthly.  
Features Some personal loans offer features like the ability to make extra repayments, or an overdraft facility.  
Fees This can be anything from annual or monthly fees to fees charged when making extra repayments or repaying the loan early if it’s fixed.  

 

What can you use personal loans for? 

There are a few reasons you could take out a personal loan, including:

  • Debt consolidation 
  • Buying a new or used car 
  • Paying for a wedding 
  • Funding a holiday 
  • Paying school fees 
  • Paying medical bills 
  • Moving house
  • Funding home renovations

Debt consolidation personal loans can be a useful debt management tool. If you have more than one debt facility such as multiple credit card, you could take out a personal loan to pay these off. You’ll then have only one debt at a lower interest rate to manage. That’s because personal loans charge lower interest rates than credit cards.

How do you compare Australian personal loans? 

There are a few ways to compare personal loans and get information, like speaking to a bank or broker. Use comparison tools, such as tables and calculators, to find loan options that suit your needs and budget and to ensure you’re getting the most competitive deal.  

  • Comparison tables help filter and narrow down personal loan options. You can compare interest rates and view features or fees attached to the loan. The RateCity personal loans marketplace was built with this in mind.
  • Calculators help you compare your loan options by showing how much a loan’s repayments may cost you depending on the amount you borrow and the interest rate. This is a great tool to use once you’ve narrowed down a few loan options to see which loan is the most affordable for you.  

How do you choose the right personal loan? 

The right personal loan for you depends on your finances and the type of loan you want. Your bank may not offer the best or cost effective loan. This is why doing your research is so important. The first thing you should do is figure out what you want from your loan. Your loan’s purpose is important because lenders may use this as a loan criteria. For example, some lenders are happy with you borrowing for a renovation, but not for a wedding.  
 
You then need to decide if you want a secured or unsecured loan as this will affect the cost, or the interest rate, on the loan. You also need to decide if you want a fixed or variable interest rate loan. 

Different types of personal loans

Secured vs unsecured personal loans

A secured loan has collateral as security on the loan, whereas an unsecured loan does not.  

  • Secured loans: With a secured personal loan, your financier will ask you to insure the loan using an asset that you own. This asset will be used to cover the personal loan amount if you default on your repayments.  

  • Unsecured loans: An unsecured loan is not secured by an asset, and so it represents a greater risk to your lender. With no insurance on your loan, they cannot recover their losses if you fail to meet your repayments. So lenders charge higher interest rates on unsecured personal loans in order to reduce their risk. These types of loans also come with stricter criteria, to ensure borrowers can meet their repayments. 

Fixed vs variable rate personal loans 

  • Fixed interest rate: Personal loans with fixed rates charge the same interest rate for the length of the loan. That means that you agree to pay a set amount of interest as part of the loan repayments each month. Regardless of whether your lender changes interest rates, your repayments will stay the same. This can be appealing as it keeps your expenses certain and  makes budgeting easier. However,  you could miss out on savings if your lender reduces their variable rates.
  • Variable interest rate: Personal loans with variable interest rates mean your repayments could change at any time. You could save money with a variable loan if there’s a rate cut, as your interest costs and repayments will fall. However, if your bank or lender raises their rates, your costs could rise. 

Once you know what your ideal loan is, you can begin your comparison use RateCity's personal loan repayment calculator to see what you can afford. Doing your own research is the best way to ensure you choose the right loan for your specific financial needs and budget.  

Can anyone get a Australian personal loan? 

Not everyone will be eligible for a personal loan in Australia. Eligibility criteria typically includes: 

  • Being 18 years or over 
  • Living in Australia 
  • Being an Australian citizen, permanent resident or holding an eligible visa 
  • Receiving regular income and/or being employed. Some lenders set minimum income requirements so be sure to read the fine print before applying
  • Good credit history 

If you have a poor credit score, you may find it harder to get loan approval. You also may be charged higher interest rates because you’re seen as a riskier borrower. This helps lenders cover their costs. Learn more about credit scores.

What documentation do you need for a Australian personal loan 

The number and type of documents a lender asks you for may depend on whether they have dealt with you before, your credit history and the information contained in your bank statements.

These may include:

  • Proof of identity - driver’s license, passport or Birth certificate  
  • Utility bills 
  • Proof of income such as pay slips or Centrelink benefits  
  • Bank statements 
  • Recent ATO tax notice of assessment or tax return 
  • Recent tax returns or financial statements 
  • Existing credit commitments and statements - credit card debt etc. 
  • If you’re applying for a personal loan for the purpose of purchasing a car, you might be asked to provide additional documentation relating to the car and its insurance policy.

Other factors to consider 

When deciding on a personal loan, it’s important to consider the following factors. 

  • Loan term: spreading your repayments across several years could lead to smaller weekly or monthly repayments. This will, however, increase the amount of interest you pay over time. 
  • Your credit provider: consider using ASIC’s professional register to check whether your lender is licensed. 
  • Fees: some loans will charge a range of fees. This is why comparison rates are helpful when choosing loans. A loan’s ‘comparison rate’ combines a loan's advertised interest rate with its standard fees and charges, giving you a more accurate idea of its overall cost. Just watch out for any extra fees and charges that aren’t included in the comparison rate. You should ask a lender whether any of these apply.  
  • Features: the bells and whistles will cost you. Adding features to your personal loan can increase the interest rate.  

What Australian personal loan can you afford 

Not sure what personal loan you can afford? Use our personal loan repayment calculator to see what loan amount and interest rate would suit your finances. If you're considering a variable rate personal loan and have a strict budget, it's wise to budget for a rate rise of up to 3 percentage points to ensure that you can afford repayments. 
 
Example of personal loan costs: 

Loan purpose  Loan amount  Loan term  Interest rate  Monthly repayments  Total cost  Total interest paid 
Holiday  $5,000   2 years 9%  $228  $5,482  $482 
Debt consolidation  $10,000   3 years  10% $323  $11,616  $1,616 
Wedding  $15,000   4 years  11% $388  $18,609  $3,609 
Renovations  $20,000   5 years  12% $445  $26,693 

$6,693 

Note: Loan repayments don’t include fees. 

 

Will my credit history affect my personal loan application? 

Your credit history is an important measuring tool for lenders in Australia to determine your loan eligibility and if you will be able to meet your repayments. Your credit report will not just show negative information, but positive too. For example, if you’ve been working to pay off your debt and improve your credit by making regular repayments on your credit card, this will be revealed.

Your credit history helps lenders to make a more informed decision about your reliability as a borrower. If you have bad credit, don’t despair. In Australia, a new and positive credit score reporting system is being rolling out. Comprehensive Credit Reporting will see additional ‘positive reporting’ factored in by the Credit Reporting Bodies in Australia. Read more here.  

If you’re still concerned about your credit history, you could speak with a finance broker. Finance brokers can organise loans on your behalf. They may be able to help you find lenders who specialise in bad debt. They won’t charge for the service; instead, they’ll earn a commission from the lender.  

Check the fees and charges 

Just as with all financial loans, lenders charge fees on loans to cover their costs and financial risk. Personal loans can come with fees and charges that include:

  • Starting fees 
  • Account keeping fees 
  • Early exit fees 
  • Administrative fees 
  • Late payment fees  
  • Redraw fees

Tip

When you’re comparing personal loans, look at ALL the associated fees and costs by reading the key facts and figures sheet for the product, and the product disclosure statement (PDS). Every loan is different, so you need to make sure you look at all fees and charges before signing on the dotted line. 
 

Frequently asked questions

Can you refinance a $5000 personal loan?

Many personal loans, much like home loans, can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent, without worrying about ending up out of pocket if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. They have higher interest rates than regular personal loans and are also harder to access.

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan – however, the process is easier and faster than taking out a mortgage.

Loan sizes usually range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to pay extra onto your personal loan or medium amount loan could bring you benefits, such as reducing the total interest you’re charged on your loan, or clearing your debt ahead of schedule.

Check your loan’s terms and conditions before putting extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

How can I get a $3000 loan approved?

Personal loans and medium amount loans from responsible lenders don’t have guaranteed approval, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income (Centrelink payments may not count – so you should check with the lender prior to making an application).

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans – they also get loaned less money. Each lender has its own policies, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

What is an unsecured bad credit personal loan?

A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset (such as a car or jewellery) as collateral or security. Lenders charge higher interest rates on unsecured loans than secured loans.

Can I get a bad credit personal loan with a guarantor?

Selected lenders will consider personal loan application from a borrower with bad credit if the borrower has a family member with good credit willing to guarantee the loan (a guarantor).

If the borrower fails to pay back their personal loan, it will be their guarantor’s responsibility to cover the costs.

Can unemployed single parents get personal loans?

It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments. If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan offers – consider contacting the lender before applying. >

Can I get guaranteed approval for a bad credit personal loan?

Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application. 

It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit, because there’s a higher likelihood that the personal loan will be repaid. 

So a borrower with good credit is more likely to have a loan approved and to get that approval faster, while a borrower with bad credit is less likely to have a loan approved and to get that approval slower.

What do single parents need for a personal loan application?

Much like applying for other personal loans, applying for personal loans for single parents will likely require the following:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Details of assets (e.g. car, home)
  • Details of liabilities (e.g. credit cards, other loans)
  • Loan amount
  • Loan term

What do credit scores have to do with personal loan interest rates?

There is a strong link between credit scores and personal loan interest rates because many lenders use credit scores to decide what interest rates to offer to potential borrowers.

If you have a higher credit score, lenders will probably classify you as a lower-risk borrower. That means they’ll be keen to win your business, so they may offer you a lower interest rate.

If you have a lower credit score, lenders will probably classify you as a higher-risk borrower. That means they might be concerned about you defaulting on the loan and costing them money. As a result, they might protect themselves by charging you a higher interest rate.

What are the pros and cons of debt consolidation?

In some instances, debt consolidation can help borrowers reduce their repayments or simplify them. For example, someone might take out a $7,000 personal loan at an interest rate of 8 per cent so they can repay a (different) $4,000 personal loan at 10 per cent and a $3,000 credit card loan at 15 per cent.

However, debt consolidation can backfire if the borrower spends the extra money instead of using it to repay the new loan.

Can I get an easy/instant personal loan?

Some lenders are able to approve applications over the internet and within minutes. However, there is a catch. People who take out easy/instant loans generally pay higher interest rates and are restricted to lower amounts than people who follow a traditional borrowing process.

How do I find out my credit rating/score?

Credit reporting bodies like Equifax, Dun & Bradstreet, Experian and the Tasmanian Collection Service will give you a free credit report once a year. You can also get a free report if you’ve been refused credit in the past 90 days.

Credit reporting bodies have up to 10 days to provide reports. If you want to access your report quickly, you’ll probably have to pay.

What is credit history?

Your credit history covers everything to do with applying for loans. It includes the number of loans you’ve applied for, the amounts you’ve borrowed and your record of meeting repayment schedules.

How do I know if I've got a bad credit history?

You can find out what your credit history is like by accessing what’s known as your credit rating or credit score.

What causes bad credit history?

Bad credit history is caused by filing for bankruptcy, defaulting on your debts, falling behind on your repayments and having loan applications rejected. Lenders are wary of borrowers who demonstrate this sort of behaviour, because it suggests they might struggle to repay future loans.