Personal loans in Australia
A personal loan can be helpful when you need extra funds – whether it’s for consolidating debt, buying a car, planning a wedding or covering unexpected expenses. With so many banks, credit unions and digital lenders offering loans, choosing the right one can feel overwhelming. Learn about personal loans here on Mozo to find the best one that meets your needs.
How to get a personal loan in Australia
Applying for a personal loan can be straightforward if you follow the right steps. Here's how the process typically works:
- Check your credit score – This can impact your eligibility and the interest rate you're offered.
- Compare lenders – Look at rates, fees, loan features and eligibility criteria.
- Decide on loan type – Choose between secured (uses an asset as collateral) or unsecured.
- Estimate costs – Use a personal loan calculator to see how much you’ll need to repay.
- Apply online – Submit your application and provide your documents (e.g. ID, income proof).
- Receive funds – If approved, funds are usually paid within 1-3 business days.
Types of personal loans
There are different types of personal loans to suit different borrowing needs:
- Secured vs unsecured: Secured loans use an asset as collateral; unsecured loans don’t.
- Fixed vs variable rate: Fixed rates stay the same over time; variable rates can change.
- Debt consolidation loans: Combine multiple debts into one loan with a single repayment.
- Car loans: Finance a new or used vehicle with fixed or variable rates.
- Home improvement loans: Fund renovations or upgrades around your house.
- Wedding or holiday loans: Borrow for one-off life events or getaways.
- Green loans: Special rates for sustainable purchases like solar panels or electric vehicles.
What to look for in a personal loan
When comparing personal loans, keep an eye out for these key factors:
- Comparison rate – This rate includes most fees and gives a clearer picture of the true cost.
- Fees – Look for application fees, monthly fees and/or early repayment fees.
- Loan term – Typically 1 to 7 years. Shorter terms mean higher repayments but less interest.
- Repayment flexibility – Some lenders allow extra repayments or redraws.
- Funding speed – Some online lenders can approve and pay funds within 24 hours.
How much will a personal loan cost me?
Your total cost depends how much you borrow, your interest, term duration, and fees charged.
Example: For a $10,000 loan over three years at 7.50% p.a. (comparison rate, which typically includes most fees), you’d repay around $311 per month and $11,200 in total.
Use our personal loan repayment calculator to estimate costs at different rates and terms.
Personal loan FAQs
What is a personal loan?
A personal loan lets you borrow a fixed amount of money and repay it over a set period with interest. It's often used for large purchases or expenses.
What’s the difference between secured and unsecured loans?
A secured loan uses an asset (like a car) as collateral. Unsecured loans don’t require security but may have higher interest rates.
Can I get a personal loan with bad credit?
It may be possible, but expect higher rates and stricter terms. Some lenders specialise in loans for borrowers with poor credit.
How much can I borrow for a personal loan?
Personal loan amounts typically range from $2,000 to $75,000, depending on the lender and your financial situation.
How long does approval take?
Some personal loan lenders offer same-day approval, while others may take 1-3 business days.
Is the interest rate fixed or variable?
It depends on the lender and product. Fixed rates offer certainty; variable rates can change over time.
Are early repayments allowed?
Many loans allow extra repayments, but some charge early exit or break fees.
What’s the difference between interest rate and comparison rate?
The interest rate is the base charge for borrowing. The comparison rate includes most fees and better reflects the true cost.
Will applying affect my credit score?
Applying for multiple loans in a short time can negatively impact your credit score.