💰 Personal Loans — What You Need to Know

Personal loans are a flexible type of finance that many Australians use to manage larger expenses, consolidate debts, or cover major life costs. Below you’ll find a clear, no-nonsense explanation of how they work, what they’re used for, and whether they might suit your needs.

🧠 What Is a Personal Loan?

Personal loans are lump-sum loans repaid over a fixed term, typically between one and seven years. Repayments usually include both principal and interest.

They can be secured (backed by an asset like a car) or unsecured (no asset required). Secured loans often have lower interest, while unsecured loans offer more flexibility.

📌 What Can You Use a Personal Loan For?

• 🏡 Home improvements or repairs
• 🚗 Vehicle purchases or upgrades
• 💳 Consolidating higher-interest debts
• 🎓 Education or professional development
• 🛠️ Tools, equipment, or setup costs for trades and professions
• 🩺 Medical or health expenses
• ✈️ Travel or major life events
• ⚡ Unexpected urgent costs

🔍 How Personal Loans Work in Australia

Lenders assess your application based on income, expenses, employment type, credit history, and financial position to decide whether a loan is affordable and suitable.

Casual, contract, or self-employed applicants may still be eligible, but additional documentation is often needed.

🔄 Types of Personal Loans

🔒 Secured Loans

Secured loans are backed by an asset, often resulting in lower interest rates.

📄 Unsecured Loans

No asset required, offering flexibility for a wider range of purposes.

📊 Fixed vs Variable Rates

Fixed rates remain constant, while variable rates can move with market conditions.

⚖️ Pros and Cons of Personal Loans

👍 Advantages

• Clear repayment schedule
• Faster access to funds than property loans
• Predictable repayments (if fixed rate)

⚠️ Things to Consider

• Interest may be higher than secured options
• Fees and charges can apply
• Borrowing can affect future lending capacity

📋 Am I Eligible?

• ✔️ Be at least 18 years old
• ✔️ Australian citizen or permanent resident
• ✔️ Have a regular income
• ✔️ Meet lender credit and affordability guidelines

🔄 Personal Loans vs Other Options

Vs Credit Cards: Loans typically provide lower rates and fixed terms compared with ongoing credit card debt.

Vs Car Loans: Car loans may have better rates for vehicle purchases, while personal loans offer broader flexibility.

Vs Redraw/Offset: Using home loan features may be cheaper, but it affects your mortgage and flexibility.

🤝 Need Help Comparing Options?

We can help you compare personal loan options and guide you through the application process.