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How to apply for a personal loan

How to apply for a personal loan

With a little preparation, applying for a personal loan could be a quick and easy way to access funds. The interest rates for this type of loan are often lower than they are for credit cards, and the set repayments and fixed end date can assist with budgeting as you pay it off.

Here’s what you need to know about the application process.

What steps are involved in applying for a personal loan?

1. Choose the right loan

Comparing different loans online and working out what best suits your needs is an important first step. Interest rates and fees will vary from bank to bank, and even a small difference can make a big impact on the overall cost of the loan.

If you want to work out the true cost of the loan including interest and fees, it’s important to look at the comparison rate. This is something lenders are required to list so you know what you’re signing up for.

A personal loan can be secured or unsecured. A loan secured against an asset will generally have a lower interest rate.

2. Decide how much to borrow

In order for the loan application to be successful you’ll need to be able to meet the repayments, so it’s essential that you work out the correct amount to borrow.

3. Get assessed by your chosen lender

Once you’re organised, the actual application process is pretty straightforward – you can apply online and get an answer about your eligibility within minutes of submitting.

With most lenders you’ll need to:

- Be at least 18 years old.

- Hold citizenship or permanent residency in Australia, or have the right to work in Australia.

- Live in Australia.

- Have a good credit rating.

- Have a regular source of income

Most lenders require you to pay an application fee, and some will charge an early exit fee if you pay the loan off ahead of schedule.

What information will I need to provide?

The information you need to provide will vary based on whether you are already a customer of the lender you are applying to.

Typically, your chosen lender will need:

1. Identification and personal details

You will need to provide basic details, such as your title, name, date of birth and address.

2. Proof of identity

When applying for a personal loan you may need to show one or more of the following:

- Australian driver’s licence.

- Passport.

- Birth certificate.

- Proof-of-age card.

3. Employment details, income and expenses

If your salary is paid directly into an account the lender has access to, you may not need to show any further documentation.

However, if you are applying to a new lender, you will need to show:

- A current copy of your employment contract.

- Recent pay slips showing your year-to-date earnings.

If you are self-employed, you will need to provide at least two Notices of Assessment from the Australian Taxation Office.

Most application forms will require information about your regular monthly expenses, such as your rent or mortgage repayments, your phone or internet plan, and so on.

You may also need to provide information about any other credit cards, loans or bank accounts you hold with other institutions.

4. Purpose of the loan

A lender will generally need some information on the purpose of the loan. For a small loan this may simply be an overview of how you intend to use the money – it might be for a wedding or holiday. For a larger loan, such as a secured car loan, you may need to provide a copy of the contract of sale.

Organisation and research are key when it comes to finding a personal loan that works for you. When you’ve finished comparing different loans, gathering your personal information and demonstrating your capacity to meet the repayments can assist with the application process.

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Today's Loan Rates

Institution Product Rate (%) Comparison
Rate* (%)
Unsecured Variable Personal Loan 11.89 11.89 Go to site
Car Loan 12.74 13.62 Go to site
Car Loan 12.74 13.62 Go to site
Car Loan 12.74 13.62 Go to site
Personal Loan - Unsecured 12.99 14.06 Go to site
Institution Product Rate (%) Comparison
Rate* (%)

The comparison rates are calculated on variable and fixed rates (unsecured loans) $10,000 over 3 years & secured car loans $10,000 over 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.
For information on how we’ve selected these “Sponsored” and “Featured” products click here.


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