What can I actually use a personal loan for?

By Cameron Thomson · · 2 min read
Fact Checked
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So you’ve found out about personal loans and you’re wondering what you can and cannot do with them. While you can take out a loan for different purposes, personal loans can’t be used for everything and we’ll get into that below. 

In general, loans are usually specialised and can be tailored to the specific purchase that is being made, such as a home. It can reduce risk to lenders and prevent borrowers from purchasing inappropriate goods or services that have outsize risk for the particular loan's purpose. 

However, personal loans have a wider range of uses. And it’s usually expected that they’ll be paid off over a shorter period of time. Do keep in mind though that there are certain restrictions on what you can spend your loan on, and the interest rates and fees associated with them can also vary. 

What can’t you use personal loans for?

Although lenders may have some variations on their policies, most of the restrictions on personal loans can be assumed. Make sure to read the terms and conditions just in case. 

Here are two specific rules to note:

  • Investing: Neither personal loans nor credit cards can be used for investing. Instead, if you want to invest in shares by borrowing money, you’ll want to take out a margin loan. 
  • Property: You cannot take out the full mortgage with a personal loan, so home loans are where you should be looking for in that instance. There can be some cases where you can fund your deposit with a personal loan, however this is usually advised against. 

What you can generally use your personal loan for?

Quite a bit actually as personal loans can be a path to carrying out plans that you didn’t have the time to save up for. Furthermore, personal loans can be used for a lot more than you might think.

Some of the things you can use your personal loan for are: 

  • Holidays: Maybe you want to go on holiday but don’t have enough in the bank to make it an unforgettable trip. With a personal loan, you can finance the holiday you want with the budget that works for you.
  • Debt consolidation: If you have a bunch of debts with varying interest rates and different repayment dates, it can be difficult to budget or even keep track of them. It is possible to use a personal loan to consolidate your debt into one loan. However debt consolidation loans can come with their own difficulties. 
  • Plan your wedding: If you really want to splash out for the big day, a personal loan can help to cover the upfront costs or even for the honeymoon. 
  • Home reno: Got a big idea for your upcoming renovation, but unsure if you’ve got the cash on hand to cover it? Personal loans can help you finance the cost much faster than you could through saving.
  • Buying a car: a car loan is a type of personal loan you can take out to finance your car purchase. The advantage of taking out a loan to purchase your new vehicle is that you don’t have to sacrifice quality by buying a lower priced car.   

Are you looking to take out a personal loan

You may be considering taking out a personal loan on one of the aforementioned avenues of spending, or maybe you’re curious at what the interest rates are? At Mozo we compare personal loan providers to help you find the best loan options available.

Personal loan comparisons on Mozo

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can search our database of 233 personal loans.
Last updated 25 April 2025 Important disclosures and comparison rate warning*
  • Low Rate Personal Loan

    Excellent Credit, $5,000 - $75,000, or up to $100,000 for eligible purposes

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 8.39% p.a.
    7.19% p.a.to 8.75% p.a.based on $30,000
    over 5 years

    Competitive low rates for borrowers with excellent credit on 1-7 year loans from $5,000 up to $75,000 (or up to $100K for home improvements or car loans); plus free extra repayments. Winner of Mozo's Experts Choice Excellent Credit Unsecured Personal Loan 2024 and Excellent Credit Secured Personal Loan 2024 awards ^. Min. income of 25k after tax, to apply.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

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  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.45% p.a.to 26.95% p.a.
    6.45% p.a.to 26.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Multi-year winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021, 2022, 2023 & 2024^'

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 6.45% would cost $35,176.93 including fees.

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  • Secured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.90% p.a.to 19.19% p.a.
    6.33% p.a.to 20.77% p.a.based on $30,000
    over 5 years

    Competitive rates depending on credit score. No monthly or early repayment fees. No penalties for paying your loan off sooner. Borrow from $5,000 to $80,000. Your choice of 3, 5 or 7 year terms. You will be given the option to use a vehicle as collateral to secure your loan. One upfront fee applies.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.90% would cost $35,025.41 including fees.

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  • Debt Consolidation Loan

    $5,000-$75,000

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 18.99% p.a.
    7.19% p.a.to 19.39% p.a.based on $30,000
    over 5 years

    Competitive fixed rates on loans up to $75,000 depending on your credit score. Zero monthly account keeping fees, no exit fees and no early repayment fees. Make weekly, fortnightly or monthly repayments, over 1 to 7 years managed entirely online, at any time. Fast and easy, 100% online application.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

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  • Ready Credit Personal Loan - 3 Year Fixed Rate, Balance Transfer Offer

    Unsecured

    interest rate
    comparison rate
    Monthly repayment
    6.90% p.a.
    n/a

    Enjoy a competitive rate on the initial balance that you request to be transferred to your bank account within 3 months of approval. Choose your repayments each month above the minimum payment due. Apply online in as little as 10 minutes. Only pay interest on the amount you have used, not on your whole credit limit. A one-off establishment fee of $249. This product is provided by National Australia Bank Limited, using certain trademarks temporarily under licence from Citigroup Inc.

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* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

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While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.