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How to obtain a personal loan in Australia

Posted 05.05.2021
How to obtain a personal loan in Australia

A personal loan can provide the financial support you need to meet your goals sooner. Whether you’re planning to buy a car, renovate your home, or consolidate debt, here’s what it takes to get a personal loan in Australia.

Decide on the loan type that’s best for you

Before you narrow it down to one option, make things easier by first choosing a loan type. This ensures you only compare “apples to apples.” 

For instance, personal loans can be variable rate or fixed rate. They can also be secured or unsecured. Therefore, it’s smarter to compare these loan types separately since they have different features.

If you’re using a loan comparison website like BestFind to shop for a personal loan in Australia, you can apply the filter function. This ensures you’re not comparing “apples to oranges.” You can also read up on the different personal loan types before deciding on the best fit.

Compare personal loan options

Shopping for a personal loan shouldn’t be a rush job or a first come, first served affair. Instead, you should carefully consider factors like:

  • Interest rates
  • Fees and charges
  • Collateral requirements
  • Interest rate type
  • Repayment frequency
  • Loan terms and amounts

This is not an exhaustive list by any means. Other features to look out for include pre-qualification options. Also, check if you can make additional repayments, redraw funds, or pay off the debt early.

Find a budget-friendly repayment

It’s true that personal loans can help you achieve things sooner. But, remember to only borrow what you can afford. A personal loan calculator is a great and convenient tool for figuring out the loan amount that best suits your income and budget. 

For instance, you can use BestFind’s personal loan calculator. Simply input your preferred amount and term to get a quick repayment estimate.

Generally, a longer term gives you smaller repayments and vice versa. However, extending your term means you pay more interest and fees in the long run.

Check if you qualify

Australian personal loan lenders usually have the following requirements:

  • Be at least 18 years of age
  • Have Australian citizenship, or permanent residency, or a valid visa
  • Be employed or earn a regular income (minimum income requirements may apply)
  • Have a good credit rating
  • Must not have recent defaults or bankruptcy and insolvency issues
  • Provide valid ID, proof of residence, recent payslips, and bank statements. Tax returns may be required if self-employed.
  • Provide personal and contact details. Also, provide information about your employment, income, assets, expenses, and other debts.

Apply for your personal loan online

If you need a personal loan ASAP, an online application can help speed things up. It also has the added advantage of allowing you to apply anytime from anywhere. Once you pick a lender and a product, you can apply through BestFind by clicking “Go to Site” in our comparison table.

How long the application process takes depends on the lender you pick. Generally, it takes about 10 to 20 minutes to complete and submit the application form. In some instances, you may have to finalise the process by uploading documents online. Or, you can visit the lender’s nearest branch office.

If your application is successful, you’ll get a loan contract, which you then sign and return. The last step is getting the money, and this can take anywhere from a few hours to several business days.

Important tip to remember: Be sure to read the fine print carefully before agreeing to the lender’s terms and conditions.

Tips for improving your chances of approval

  • Make payments on time. This is a great way to build a good credit history and prove your reputation as a responsible borrower.
  • Check your credit score. Fixing any errors can boost your credit score.
  • Pay down debt. Clearing some of your debt can also repair your credit score and lower your debt to income ratio.
  • Skip the multiple loan applications. These can dent your credit score. Try going with lenders that initially provide estimates via a soft credit check instead.