When a big expense has arrived, or if you require extra funds for success, a personal loan seems a lifeline. Whether you’re funding a home renovation, consolidating debt, or planning a wedding, a personal loan affords you access to cash at those moments when you’re sure to need it most.
LoanCalculator.com.au is Australia’s leading comparison website, and we have enabled thousands of Australians to find smarter ways for themselves to finance their goals. We think getting a loan shouldn’t be confusing or intimidating.
Our objective is straightforward — to make personal loans transparent, easy to compare, and tailored to your budget. As you peruse this guide, we are here to help you work through how to successfully get approved for a personal loan, tell you what the standard requirements lenders are seeking when they come up with a loan application, and we have some practical steps you can take to increase your chances for success.
What Lenders Look For When You Apply
While the specifics vary between banks, credit unions, and online lenders, most will assess your application based on a few key factors. Understanding these upfront can help you prepare a stronger application.
Key Personal Loan Requirements
- Proof of Identity: You’ll need to provide valid identification like a driver’s licence, passport, or Medicare card. Lenders are legally required to verify your identity.
- Proof of Income: Lenders need to see evidence of a regular income to assess your ability to make repayments. This can be through payslips, bank statements, or tax returns if you’re self-employed. We’ve seen that lenders have become more flexible in recent years, but consistent income is still crucial.
- Credit History: Your credit report is a major factor. Lenders check your repayment history, any defaults, and existing debts to gauge your reliability as a borrower. A good credit history often leads to better interest rates.
- Debt-to-Income Ratio: This is a comparison of your existing debts (like credit cards or other loans) against your income. A high ratio might signal to lenders that you could struggle with additional repayments.
- Residency Status: Most Australian lenders require applicants to be an Australian citizen or permanent resident. Some may consider certain temporary visa holders, though the conditions are often stricter.
How to Get Approved for a Personal Loan: A Step-by-Step Guide
Not everyone has a perfect financial record. Maybe you’ve missed a payment in the past, or your income isn’t always consistent. That doesn’t mean a personal loan is out of reach. Here are seven practical steps to boost your chances of approval.
1. Check Your Credit Report
Before you even think about applying, get a free copy of your credit report. This lets you see exactly what lenders see. Check for any errors, like incorrect defaults or accounts that aren’t yours, and dispute them immediately. Paying your bills on time and keeping credit card balances low are simple habits that can significantly improve your score over time. Comparing lenders through LoanCalculator.com.au won’t affect your credit score, as we use a soft credit check process, so you can explore your options, risk-free.
2. Determine How Much You Really Need
It can be tempting to apply for a little extra, but it’s wise to only borrow what you truly need. Requesting an amount that seems disproportionate to your income can raise a red flag for lenders. A modest loan request paired with a clear plan for how you’ll use it shows you’re a responsible borrower. Use our free Personal Loan Calculator to estimate your repayments before you apply. This will show you how different loan amounts, interest rates, or loan terms affect your budget — no sign-up required.
3. Get Your Documents in Order
Being organised makes the application process much smoother. Before you start, gather all the necessary documents. This typically includes:
- Identification: Driver’s licence or passport, and/or 100 points of identification.
- Proof of income: Your two most recent payslips or three months of bank statements.
- Details of assets and liabilities: Information about what you own (like property or savings) and what you owe (like credit card debt or other loans).
Having everything ready will speed up your application and create a positive impression.
4. Demonstrate Financial Stability
Lenders look for evidence of money management. Employment history, steady job security, recurring income, and a record of paying bills on time all work in your favor. Even if your credit score isn’t perfect, showing that you have consistent savings habits or a stable rental history can strengthen your application. One tip is to have your salary paid into one main account for at least three months before applying. This makes it easier for lenders to verify your income and assess your cash flow.
5. Compare Lenders and Loan Types
Don’t just go with the first lender you find. There are two main types of personal loans: secured and unsecured.
- Secured loans are tied to an asset, like a car. They generally have lower interest rates because the asset acts as collateral, reducing the risk for the lender.
- Unsecured loans don’t require collateral, which gives you more flexibility in how you use the funds. However, they usually come with higher interest rates.
We compare rates, fees, and features from over 40 reputable Australian lenders — including banks, credit unions, and online finance specialists — so you can make an informed decision with confidence.
6. Consider a Debt Consolidation Loan
If you’re juggling multiple debts like credit cards or store cards, a personal loan can be a smart way to consolidate them. Rolling all your debts into a single loan means you only have one repayment to manage, often at a significantly lower interest rate than credit cards. This can help you get on top of your finances and may even improve your credit score over the long run.
7. Look Beyond Traditional Banks
Major banks might reject your application if you have a low credit score. Don’t be discouraged. Non-bank and specialist lenders are often more flexible. They may look beyond your credit history and consider your current financial situation, offering a “second chance” to prove your creditworthiness. While interest rates might be higher, it can be a viable path to securing the funds you need.
Find the Right Loan for You
Getting a personal loan should be a step toward achieving your financial goals, not a source of stress. By preparing properly, understanding what lenders look for, and comparing your options, you can approach the application process with confidence.
You can use our state-of-the-art loan calculator, giving you instant results – and there’s no sign-up required.
At LoanCalculator.com.au, we make it easy. Once you enter a few quick details, you’ll instantly see side-by-side comparisons of matching lenders, helping you find the best rates and terms within minutes. Many of our lending partners offer conditional approval in as little as 24 hours.
Ready to take the next step? Explore your options and empower your financial journey today.
