Your guide to easy personal loans

Wouldn’t it be nice if things were all just a little bit easier? When it comes to personal loans, we sure think so.

When it comes to matters of money, “easy” can seem like a trap. All too often, it’s linked to schemes that take advantage of people’s need for fast money or lower financial literacy to get them into sub-par deals.

So let’s re-frame the word “easy”. Finding the best loan for you might not be the easiest thing in the world, but once you’re armed with the information to help you navigate loan lingo, nearly every loan will feel like a breeze!

Still want to weed out the loans that won’t have you scratching your head? We’ve done the work.

Let’s put it this way: any personal loan is easy if you’re informed, educated, and stay level-headed about it!

However, there are definitely some loans that aim to have an easier application process and which avoid using intentionally confusing language. We’d be inclined to call those loans easier than the loan whose website is covered in asterisks and acronyms.

The biggest factor in making any loan easier is actually preparing yourself. Not just in terms of getting educated about personal loans, but also in giving yourself the smoothest and easiest chance at approval. This involves knowing your loan eligibility, getting your documentation together, and knowing how the loan process works.

You can also find loans that will make the repayment process much easier than others, whether through additional repayment features or flexible repayment schedules. More on that later!

If you’ve ever considered a personal loan, you’ll know that you’re spoilt for choice when it comes to what kind of loan you want to take out. We’ve done a quick rundown of some loan varieties you’re likely to see - and whether the sort of loan you choose could impact how easy or difficult it is.

• Loan type: The actual type of loan you choose is unlikely to make a huge amount of difference to the difficulty of applying or paying off your loan. There are exceptions to this - a car loan tends to have more conditions attached to it than, say, a holiday loan. Some loans might require evidence of your spending - certain medical loans or green home renovation loans - which can add a potential layer of complication.

• Secured: Secured loans use a valuable possession (like a car, property, or jewellery) as collateral, giving the lender some assurance that you’ll pay them back. If you default on your loan (that is, stop making your payments), they can sell your asset to make back their losses. Thanks to this risk reduction, secured loans often have lower interest rates. That said, the process of valuing your asset can add a complication to the loan application process - and make missing payments a much bigger deal.

• Unsecured: An unsecured loan isn’t held against any assets, making it much more high risk to a lender. These can have lower borrowing limits and higher interest rates, but they can also be a lot easier to apply for without the hassle of security.  

• Fixed rate: The interest rate on a fixed rate personal loan will stay the same for the life of the loan. If you enjoy the simplicity of not having to worry about rate changes, this could definitely be an easier loan option for you.

• Variable rate: In contrast, a personal loan with a variable interest rate will change with fluctuations in the market. These can shift for good and for bad, depending on interest rate movement, and tend to offer lower initial interest rates than fixed rate loans. 

There are also loans called “low doc loans”. If you have been searching for easy loans, you may have come across these, which are a type of loan that requires minimal documentation. These are often brought up when it comes to loans for self-employed or low income people, as you might not need to show as much evidence of employment and income. Because you need less documentation for these, they might be considered “easy” by some.However, the downside of this is that low doc loans tend to offer higher interest rates and lower flexibility. While it might be easier to apply for them, paying them off can become a more difficult process.

The features of a loan can mean the difference between your standard everyday personal loan and a personal loan that makes your life easy. If you want an easy personal loan, look for the features that will make the greatest difference to you. Here are some common features we’d watch for:

• Flexible repayment schedule: Nothing makes a repayment more difficult than having it scheduled just before your pay comes in. Loans offering flexible repayments will allow you to set your own repayment terms, meaning you can choose whether monthly or weekly (or even fortnightly) payments work best for you, and find the timing that lines up best with your life.

• Extra repayments: An easy loan should be easy to pay back, and allowing extra repayments is key to that. Should you find yourself with some extra cash, the last thing you want is to be charged a fee to make an additional repayment - no one needs the extra complication!

• Redraws: To some, an easy loan means being able to do what you want with the money. That might even mean taking some back out after you’ve paid it off if you find yourself in need of some extra cash. Many loans don’t allow a redraw facility, or charge heavily for this. Finding a loan that lets you redraw money will make your life a lot easier.

• Early repayment: Being charged extra because you want to pay off your loan before your term is over? That’s a fuss that no one needs. To make exiting your loan as easy as entering it, opt for a loan that doesn’t charge for early repayment.

• Speed: A lot of people consider speed of approval and funding the main points in determining an easy loan, and often online lenders and peer to peer providers will offer faster turnaround times than brick and mortar banks.

The easiest approval process will depend on what you consider to be easy, and on your personal circumstances. For example, if you have a spotless credit history and an excellent credit score, you might find your loan approval is a lot quicker and easier than someone who needs to improve their credit score.

That said, some lenders do make a point of highlighting their easy applications process and funding speed. Of the loans in Mozo’s database, some to note include:

• Harmoney say that 99% of their loans are funded within 24 hours of submission, based on 2021 data. Their application process can be done entirely online, without any in-person meetings or fussy phone calls.

• Plenti are a peer-to-peer lending service and say that their applications process is ultra fast and easy - they offer a quote for your rate in 1 minute with 10 questions, and reckon their application process clocks in under 10 minutes. 

• Now Finance also boast a quick quote process, offering a rate in 2 minutes without impacting your credit score. They also promise a response to your application in 2 minutes, and access to your funds in 24-48 hours.

• OurMoneyMarket has a slightly more conservative approach, saying that their online application process will take a whole 5 minutes to complete. They also offer no obligations pre-approval for your loan, if you’d like to shop around.

Eligibility requirements for most loans are the same, with the standard list of requirements being:

• Over 18

• A permanent resident or citizen of Australia

• You pass a credit check with the lender’s credit bureau of choice

• Earning an income - some personal loans will have an income threshold they require you to meet

• Employed - some loans require you to be employed, but others will accept Centrelink payments as income

• Not in financial hardship with other providers

There are some small changes from loan to loan, but these tend to be the major criteria which carry through. 

That said, there are things you can do to make the loan applications process easier, which will make going through these eligibility checks a breeze.

The loans process will be much easier - and much quicker - if you come prepared. 

This means being ready for all of the questions and documents an application will ask of you. We’ve compiled some ways to stay on top of the loan application process:

• Keep copies of your identification documents. Most loan applications will require at least 100 points of identification, so make sure you have access to enough. Remember that this goes beyond just your passport or licence and can include things like rate notices or recent bills, so don’t throw these directly in the bin.

• Get your credit in shape. If you aren’t sure what your credit score is, it might be time to check. Noticed that it could use some work? Read our guide to improving your credit score and do all that you can from your end, as you’re more likely to encounter difficulty in loan applications if you have bad credit.

• Read the terms and conditions of the loan first. If you’re interested in a loan, learn about it. We know that getting into the fine print can seem a little daunting, but often you’ll find something you’d never even considered. Oh, that car loan rate is only for electric vehicles? This loan is only for members of a certain bank? Better to read that now than to get rejected for a loan!

Hopefully you’re feeling a lot more confident and in control as you head forward on your personal loan journey. The loans compiled below are not loans that market themselves as easy, necessarily, but with your newfound knowledge and ability to decipher all that loan language? You’ve got this.

You’ve read up on easy loans, but what about the best loans? Find Mozo’s picks for the best personal loans.