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Minimum and maximum loan periods vary between 6 months and 10 years. Comparison
interest rates vary between 6.55% and 20.89% p.a. Total interest repayments vary between
$1,387 and $4,165 over the life of the loan. *Comparison rate is based on an unsecured loan
of $10,000 for a term of 3 years. WARNING: This comparison rate is true only for the
examples given and may not include all fees and charges. Different terms, fees or other loan
amounts might result in a different comparison rate. These rates can change without further
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Online personal loans – Find & compare Aussie online lenders
Shopping for a personal loan now also involves hitting up your laptop or smart device. Once you get a thumbs up from the right lender, you can seal the deal with a virtual handshake while you sit on your couch. But, before you start clicking away, read our guide on online personal loans for all you need to know when navigating the online finance space.
How do online personal loans work?
First things first: do you need extra cash to pay for a wedding, car, renovation, or dental visit? A personal loan can help you cover the initial cost. A personal loan’s flexibility can be much handier than this since it also extends to holiday trips, debt consolidation, and more.
That being said, an online personal loan is one where you simply establish a borrowing arrangement with a lender via online back-and-forths. Here’s a sum-up of features associated with online personal loans:
- Maximum and minimum amounts. Australian lenders generally let you borrow any amount up to $50,000 or even $100,000. You tend to get more financial leeway when your credit score and income are well padded.
- Maximum and minimum terms. Debt repayment can take as long as five, seven, or ten years depending on loan type and amount. Or, you can clean up your debt in as little as 12 months.
- Online debt management. When you apply, you usually open an online account with the lender. After approval, you can often log into the account to stay on top of your debt. You can typically view details such as loan balance, interest rate, due dates and amounts for your next repayments, redraw balances, and transaction history. You can also set up your repayments via transfers, BPAY, and debit orders.
What are the available types of online lenders?
The online finance industry in Australia is generally a blend of lender types using different platforms and offering a hybrid of financial products. Your alternatives to brick and mortar lenders include:
- Traditional banks. Some traditional financial institutions (including the big four) have also set up an online presence while also catering to walk-ins.
- Credit unions. These offer an alternative to bank services and tend to work by a different set of rules.
- Peer to peer lenders. P2P lending is an increasingly popular non-bank alternative. In basic terms, it can be described as Aussies borrowing from other Aussies through an online marketplace or platform set up by a P2P company. P2P lenders usually offer smaller, unsecured loans with shorter terms compared to mainstream banks. In addition, they typically offer risk-based rates, which means you get competitive terms if your creditworthiness is above board.
- Other non-bank finance companies. These include mutual banks, building societies, and other alternatives competing for the small lending market share not swallowed up by the big banks.
Pros of dealing with online lenders
What do online lenders have over their branch-only counterparts? Generally, here’s why you should hop atop the progressive wave of online personal loan applications:
- Convenience. You can apply and receive money in your bank account just by tapping a few buttons on your phone or laptop.
- Fast funding. Most lenders offer a streamlined application process you can complete in a few minutes. Getting notification of approval or a bank deposit can be just as fast.
- Better bargains. Online lenders are more likely to offer competitive rates. That’s because it’s easier to make a quick profit when you cut out the cost of running physical branches.
- Easier shopping. Comparing multiple offers online has never been easier with comparison websites like BestFind. Furthermore, some lenders offer soft credit checks that won’t dent your credit rating. You’ll, therefore, be able to see if you qualify for the loan before committing.
- Better approval chances. Online lenders are generally not too focused on your credit score. Instead, they also consider your income and other financial details. This can, therefore, afford you a better chance at approval.
- Better debt management. You can easily keep tabs on the progress of your debt through online means.
Cons of dealing with online lenders
- Disreputable lenders. Some online lenders prey on borrowers by charging staggering rates and fees.
- No lines of credit. You might not be able to get a line of credit from an online lender. This option works similarly to credit cards and allows you to draw money in short bursts, whenever you need it and up to a specific limit. There’s no fixed repayment period, and you only pay interest on the portion you’ve used.
- No in-person discussions. You won’t be able to meet with a consultant if you need up-close guidance when applying.
Which types of personal loans can I apply for online?
Check out the following types of personal loans to get a snapshot of your options:
- Unsecured personal loans. “Unsecured” is typically the default personal loan type with no collateral requirements. They have slightly higher interest rates than secured loans.
- Secured personal loans. If you want to curb finance costs, you can use your car or property as collateral. That means the lender can pocket the asset instead of your repayments should you default. This guarantee reduces the lender’s risk, and they return the favour by lowering your rate.
- Fixed-rate loans. With a fixed interest rate loan, you’re booked in for the same rate for the entire term. This means no sudden increases to your repayments, but also no savings when the rate goes down.
- Variable-rate loans. A variable interest rate typically loops back and forth under the influence of the RBA cash rate. You can potentially save if the rate heads down. But if the rate goes up, you pay more.
How do I choose the best online personal loan?
When shopping for a personal loan online, you generally need to check over the following:
- Interest rate. A low interest rate should be your first port of call if you want to tone down borrowing costs.
- Comparison rate. If you want a truer estimate of the loan’s total cost, keep the comparison rate in your sights when checking out a particular offer. It represents the interest rate and other standard borrowing costs.
- Fees. Also, check for additional fees that might be left out of the comparison rate bundle. Fees and charges generally include establishment fees, monthly service fees, and late payment fees.
- Monthly repayment. Your monthly repayment is based on your loan amount and term. Our online personal loan calculator is an easy-to-use tool that lets you work out a repayment that stacks up well with your budget. Before choosing a loan term and amount, look over the lender’s maximum limits. And, when calculating your repayments, keep in mind that longer terms add more weight to your debt. To keep interest costs down, you can choose a shorter loan term, but this might mean paying more dollars per instalment.
- Repayment options. The ability to pay off your loan at a faster rate is another flexible option that allows a quick exit from your debt and more savings. Check up on extra repayment options and whether they come with early repayment fees. This option usually comes with a redraw facility that allows you to recall any extra repayments you’ve made in times of need.
How do I choose the best online lender?
You can always kick-start the process by using our product tables above to compare different online lenders. BestFind only features authorised and reputable lenders that hold a credit license from ASIC. If you want to err on the side of caution, make sure to also check for online reviews. Lastly, keep your wits about you by looking out for the following online loan scams:
- A ridiculously low interest rate
- Promises such as “personal loans online, instant approval, no credit check”
- Having to pay money upfront before receiving the loan
- The lender puts too much pressure on you to apply
- International or non-Australian numbers
How do I apply for a personal loan online?
Head over to our comparison table by scrolling up to the top of this page. Compare personal loans online and click “Go to Site” once you nominate a lender. Here’s what you’ll need when applying:
- Be over 18 years of age
- A stable, regular income
- Proof of income – bank statements and payslips
- Valid ID – passport or driver’s licence
- Financial details about your existing debts, expenses, and assets
Important tip: During the application process, you’ll have to submit sensitive financial and personal details. Before you upload these details, ensure the lender’s website is safe and secure by checking the URL. Ideally, it should be in the form https:// where the ‘s’ stands for secure. Also, look for a closed padlock at the top of the page – this is another indicator of a safe website.
Online personal loans FAQ
How do I improve my chances of approval?
- Clean up errors in your credit history. These can significantly hike up your credit rating.
- Pay your debts on time. This long term strategy will also put you ahead when it comes to proving your worth as a reliable borrower.
- Only borrow what you can afford. Lenders prefer responsible borrowers who can settle their debts without too much difficulty.
- Avoid too many applications. With the ease of online applications, you might be tempted to hit up as many lenders as you can. However, you’ll likely trigger a hard credit check with each application resulting in more damage to your credit score.
Can I apply online if I have bad credit?
Yes, you can find out more about online bad credit personal loans here.
How quickly can I get funds?
This varies from provider to provider. However, online lenders are notoriously fast, with some delivering a decision within minutes.
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