How do personal loans work?
Personal loans are simple at heart: a lender pays out a set amount, and you pay it back in regular repayments until the balance hits zero. Interest is charged on what you still owe, and repayments can be weekly, fortnightly or monthly — easy to line up with your pay.
- 1
Pick the amount
Work out what the goal costs. Quotes or a rough budget help.
- 2
Choose the term
Shorter terms mean bigger repayments but less interest overall; longer terms cost more in total.
- 3
The lender assesses
Income, expenses, debts and credit history are checked, then a rate and amount are set.
- 4
Sign and settle
You sign, the money is paid out, and repayments begin.
What can I use a personal loan for?
Almost anything legal and sensible. Lenders mainly want a clear purpose and repayments that fit your budget.
- Clearing debts — swap a stack of cards for a single repayment with debt consolidation.
- Travel — flights, resorts, cruises and honeymoons.
- Weddings — venue deposits, rings and the photographer.
- Home upgrades — kitchens, bathrooms, pools and solar.
- Health — dental, surgery, IVF and out-of-pocket costs.
- Life’s curveballs — car repairs, vet bills or a dead hot water system.
- Getting ahead — a course, legal fees or furniture for a new place.
Secured vs unsecured personal loan: what’s the difference?
A secured personal loan uses an asset — usually the car, caravan or boat you’re buying — as security, while an unsecured personal loan doesn’t. With something to fall back on, lenders often price secured loans more sharply.
| Secured personal loan | Unsecured personal loan | |
|---|---|---|
| What backs it | An asset, such as a car, boat or caravan | Your promise to repay — no asset attached |
| Common uses | Vehicles, caravans, boats and some equipment | Debt consolidation, travel, weddings, medical, renovations |
| Pricing | Often sharper, as the lender carries less risk | Usually higher, to reflect the extra risk |
| Loan size | Can often go bigger | Tends to be more conservative |
| If repayments stop | The lender may repossess the asset | Missed payments hit your credit file |
Our guide to secured vs unsecured personal loans goes deeper.
Fixed vs variable personal loans: which suits you?
A fixed-rate personal loan keeps the same rate, and usually the same repayment, for the whole term. A variable rate can move up or down with the market, so your repayments can change. Both have their place.
- Go fixed if you like knowing exactly what leaves your account each pay cycle.
- Consider variable if you plan to pay extra or clear the loan early — variable loans can be more flexible.
How much can I borrow with a personal loan?
It comes down to what you can comfortably repay, not a number on a chart. Lenders work that out from a handful of things.
- Income and stability — including self-employed and casual income.
- Living expenses — what it really costs to run your household.
- Existing debts and limits — card limits count even at a zero balance.
- Credit history — repayments, defaults and recent enquiries.
- Security — a secured loan can open up a larger amount.
Why use a personal loan broker instead of applying to five lenders?
Because every formal application leaves a mark. When you apply for credit, the lender’s enquiry is recorded on your credit report, and a cluster of applications in a short time can make the next lender nervous. A broker does the legwork first, so you apply once, to a lender that fits.
- 1
Tell us what it’s for
One short form, about 2 minutes, little or no paperwork. Enquiring won’t affect your credit score.
- 2
We search 60+ lenders
Matched to your situation, not just your score.
- 3
You choose, then apply
We explain what we’ve found and tell you before any credit check happens.
- 4
We see it through
One team, right through to settlement.
We’re an Australian-owned credit broker arranging personal loans Australia-wide — not a lender, and not a comparison table. We do the finding and the chasing.
What you’ll need
- Photo ID, such as a driver licence or passport
- Recent payslips, or tax returns if you’re self-employed
- Recent bank statements
- A list of current debts, cards and their limits
- A rough monthly budget
- Quotes or invoices for what you’re buying, if you have them
Who it usually suits
- Aged 18 or over
- An Australian citizen or permanent resident — some lenders consider visa holders
- Regular income from a job, your own business or another stable source
- Repayments that sit comfortably alongside your living costs
- A credit history lenders can assess — a few blemishes don’t automatically rule you out
