Personal Loans Australia
A personal loan is funding provided to an individual for a personal purpose, such as a vehicle, travel or a major purchase. Personal loans may be secured by an asset or unsecured, with repayments structured over an agreed term. The structure available depends on the lender and the borrower's circumstances.
A personal loan can help you move forward with a major purchase or life event without waiting to save the full amount. The right loan is the one that matches your purpose, your repayment capacity and your circumstances. Gateway Asset Loans compares options across a panel of over 70 lenders to find a personal loan suited to your needs.
How Do Personal Loans Work?
A personal loan provides a lump sum that you repay over an agreed term. The funds are used for a personal purpose, such as buying a vehicle, funding travel or covering a major purchase.
Repayments are structured over a term that suits the purpose of the loan, often between one and seven years. Your broker helps match the term to the purpose so the repayments fit comfortably within your budget.
Personal loans may be secured by an asset, such as a vehicle, or unsecured. Secured loans generally offer a more competitive structure because the lender holds an interest in an asset, while unsecured loans offer speed and flexibility.
What Assets Can You Finance?
Key Terms Explained
What is a secured versus unsecured business loan?
A secured loan is backed by an asset, such as a vehicle, which the lender can claim if the loan is not repaid, while an unsecured loan has no specific asset as security. Secured loans generally offer a more competitive structure, and unsecured loans offer speed and flexibility.
What is a balloon payment?
A balloon payment is a larger lump sum due at the end of a finance term, which lowers the regular repayments during the term. It can be paid in full, refinanced, or settled by selling or trading the asset. Whether it suits you depends on your cash flow.
What is a novated lease?
A novated lease is a three way agreement between an employer, an employee and a lender, where the employee leases a vehicle and the employer makes the lease payments from the employee's pre tax salary. Tax treatment depends on individual circumstances and should be confirmed with an accountant.
Secured Versus Unsecured Finance
Personal loans broadly fall into secured and unsecured options. The comparison below outlines the key differences between the two.
| Structure | Who owns the asset | Balance sheet treatment | GST treatment | Best suited to |
|---|---|---|---|---|
| Secured Personal Loan | You own any asset purchased | Not applicable for personal borrowing | GST applies to any taxable purchases made | Borrowers with an asset to offer as security |
| Unsecured Personal Loan | You own any asset purchased | Not applicable for personal borrowing | GST applies to any taxable purchases made | Borrowers wanting speed and no asset security |
| Fixed Rate Loan | You own any asset purchased | Not applicable for personal borrowing | GST applies to any taxable purchases made | Borrowers wanting predictable repayments |
| Variable Rate Loan | You own any asset purchased | Not applicable for personal borrowing | GST applies to any taxable purchases made | Borrowers wanting flexibility to repay early |
Tax treatment depends on your individual circumstances and should be confirmed with your accountant or tax adviser.
Who Can Apply for Personal Loans Australia?
Why Use a Broker for Personal Loans Australia?
Frequently Asked Questions
Do I need to provide security for a personal loan?
Not always. Personal loans can be secured by an asset such as a vehicle, or unsecured. Secured loans generally offer a more competitive structure, while unsecured loans offer speed and flexibility. Your broker outlines the security position for each option.
Can I get a personal loan if I am self employed?
Yes, self employed borrowers can access personal loans. Lenders will assess your income and capacity to repay, which may involve reviewing financial statements or bank statements. A broker can identify lenders that work well with self employed applicants.
How much can I borrow with a personal loan?
The amount you can borrow depends on your income, expenses and capacity to repay, as well as the lender's criteria. Your broker helps you understand the likely range for your circumstances before you apply, so you can plan your purchase accordingly.
Can I use a personal loan to consolidate debts?
Yes, consolidating existing personal debts into a single personal loan is a common use. It can simplify your finances with one repayment, and may reduce your overall repayment if the new structure is more competitive. Your broker can compare your current position with the options available.
Can I repay a personal loan early?
Many personal loans allow early repayment, but some may include early repayment fees, particularly for fixed rate loans. Your broker explains the early repayment position for each option before you commit, so there are no surprises.
How long does it take to arrange a personal loan?
Personal loans are often arranged quickly, particularly unsecured loans. Some can be settled within days depending on the lender and your documentation. Your broker gives you a realistic timeframe for each option up front.
Related Finance Solutions
Ready to explore your personal loans australia options?
Submit a quick quote and our brokers will compare options across our panel of 70+ lenders to find a suitable structure for your circumstances.
Get a Quick QuoteFor further reading, see business.gov.au finance and capital guidance.