Personal loans are unsecured loans that you can apply for and use for whatever you want.¹ A simple agreement between you and a lender or lending institution, getting a loan simply means that you receive some amount of cash from the lender that will generate interest and must be repaid over a specific period of time.
Some Australians take personal loans to buy cars, pay for weddings, undertake renovations, or consolidate debt. The options are endless!
How Personal Loans Work
There are a plethora of personal loans available in Australia. You are eligible for these loans based on individual income, employment status, how much you can pay monthly, and your credit score. Different banks and lending institutions have varying criteria that applicants should meet before being approved for the loan. However, most lenders require that you meet the following conditions;
- Be at least 18 years of age
- Currently residing in Australia
- Provide three payslips
- Bank statements
- Two-year tax return statements for self-employed
- Statements about your credit cards or loan accounts
That said, the following categories of people are eligible for personal loans;
- Those with low income – Australians with low income can be approved for low-income personal loans.
- Pensioners – applicants currently receiving pension can get personal loans for pensioners.
- Australians receiving Centrelink payments – applicants receiving Centrelink payments and other benefits are eligible for personal loans for people on Centrelink payments. However, you should ascertain that you can make repayments before applying.
- Those with bad credit – you can still apply for personal loans with bad credit. Note that you might end up paying high-interest rates due to your poor credit score.
- Individuals with an existing credit card and personal loans – lenders can also approve personal loans for those with a pre-existing credit card and personal loans.
Most financial institutions can also provide personal loans for those who don’t meet the minimum requirements. However, for such cases, you should submit your application with a guarantor.
Personal Loan Options in Australia
As mentioned, several banks and financial institutions in Australia offer personal loans. Some of the best banks include;
ANZ Banking Group
Lengthily known as Australia and New Zealand Banking Group Ltd., ANZ offers a wide array of quality financial products and services to individuals and organizations. Since its inception in 1835, the bank has provided its customers with financing options tailored to their needs. ANZ personal loans offer customers peace of mind for their availability and consistency.²
The bank offers two categories of personal loans. ANZ variable rate loans are best for making purchases or consolidating debt. They enable borrowers the flexibility of making extra monthly premiums according to their budget and preferences. On the other hand, ANZ fixed personal loans feature fixed interest rates for a defined period.
As for the interest rates, ANZ charges 12.45% pa for fixed-rate personal loans and 15.99% pa for variable interest loans. Borrowers can apply for loans from $5,000 to $50,000 with an application fee of $150.
Bank of Melbourne
The Bank of Melbourne is another excellent provider with competitive rates, much flexibility, and with multiple extras for personal loans.³ Like ANZ, you get to choose between fixed and variable personal loan options. The bank provides different loan terms based on your selected type of loan. You can get 1 to 5 years for fixed-rate loans and 1 to 7 years for variable rate personal loans.
Bank of Melbourne also provides a wide range of loan amounts. You can borrow up to $80,000 for car loans and $50,000 for ongoing credit. They can also approve as little as $3000 for secured and unsecured personal loans. The bank charges up to 14.06% for variable-rate loans and 12.57% interest for fixed-rate personal loans.
Bank Australia
Being the first customer-owned bank, Bank Australia is known for its excellent customer service. They offer personal loans that fit every citizens’ situation.⁴ Unlike other major financial institutions, Bank Australia offers all their personal loans with flexible repayment options. This means that you can choose how you intend to make your repayments. You can make weekly, fortnight, or monthly payments according to how you receive your paycheck.
Customers also enjoy low application fees compared to other banks. Bank Australia’s personal loans have interest rates from 11.89% with a minimum loan amount of $1,000.
The Bottom Line
Personal loans are a good option for those looking to complete individual projects. With the wide array of lenders available in Australia, you should consider various factors before choosing a lender. Your choice should be based on the financial situation, personal needs, and previous credit history.
References
[1] “Personal Loans – Loans.Org”. 2020. Loans.Org. https://loans.org/personal.
[2] “Fixed Rate Personal Loan | ANZ”. 2020. Anz.Com.Au. https://www.anz.com.au/personal/personal-loans/fixed-rate/?cid=af|3631404|23263580|3079890|256426870&dclid=CjkKEQjw_qb3BRDEw9CIyMqN7sUBEiQA53Th3P89AivXJevM2lL1rIa9rOuLtXsL05sS6-5MIDMINb3w_wcB.
[3] “Personal Loans | Bank Of Melbourne”. 2020. Bankofmelbourne.Com.Au. https://www.bankofmelbourne.com.au/personal/personal-loans.
[4] “Bank Australia – Personal Loans”. 2020. Bankaust.Com.Au. https://www.bankaust.com.au/personal/borrow/personal-loans/.
