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Steps to Get a Personal Loan in Australia

Steps to Get a Personal Loan in Australia

Before applying for a personal loan in Australia, you need to understand how the financial product works and if it is a good choice for your requirement. The specific application steps may differ, but there are common factors considered by all lenders.

Paula M. Graham
Finance
Oct 24, 2021

Table of Contents

Before applying for a personal loan in Australia, you need to understand how the financial product works and if it is a good choice for your requirement. The specific application steps may differ, but there are common factors considered by all lenders.

For example, alex.bank - personal loans is a digital product and the process of applying for it will differ compared to traditional banking. But there would be common denominators like a credit score that all banks will consider.

The article will attempt to provide information on personal loans and how you can get one in Australia.

Why Take a Personal Loan in Australia?

As of late 2020, the total amount of outstanding personal loans in Australia is over $145.5 billion. One can get a personal loan for various purposes. For example, if you want to undertake a home improvement project, a personal loan can help finance the renovation. You want to buy a car or go on a holiday, this loan can help you.

Debt consolidation is another reason to opt for a personal loan. Instead of dealing with multiple loans with different repayment terms, you can streamline debt into a single loan. 

According to a report, 88% of Australians take personal loans for planned purchases like those mentioned above. The remaining 12% take these loans for health, repair or maintenance emergencies. So the majority of people research and plan for these loans in advance, and the article will help you do the same.

Steps to Get a Personal Loan in Australia

Take a look around the financial market and understand the options available before you start applying for loans.

Check Your Eligibility Before Applying

Most lenders require you to fulfil specific requirements to be eligible for the application process. Some of these standard requirements are that you must:

  • Be over 18 years old
  • Be an Australian citizen or hold permanent residence
  • Have a steady and stable source of income
  • Not have been bankrupt

These are the first set of details lenders will verify. Hence, ensure you have relevant documents supporting the eligibility criteria.

Explore Personal Loan Products

Next, compare different personal loans at your disposal. According to reliable sources, some of the parameters that one should use to compare personal loans are comparison and interest rate, fees, extra repayments, loan use and term. 

Interest Rates

This is the percentage applied to the principal loan amount, which you will pay at every repayment period. There are products like alex.bank - personal loans that offer one of the most competitive rates in the market.

In the case of personalised rates, having a good credit score could help you get a fair interest rate on a loan. 

Fees

If you are a new customer, you might have to pay an establishment fee. Then there are application fees, monthly service fees, ongoing and recurring fees, missed payment fees and administrative fees that might have to be paid along with the loan amount. Lenders may or may not charge these fees, enquire about the detailed fee list before applying.

Flexibility

Depending on the lender, you can pay off loans in 6 months or take a loan term of 60 months. You can make payments every week, fortnight or monthly.

Early payout is an important feature to compare. If you want to make earlier repayments than the agreed period, you should not be penalised for it. Look for lenders who will not charge you a fee for clearing out your balance early.

Application Process

How straightforward is the loan application process? Do you have to fill in several forms at the branch, or can you fill them online? For example, when applying for alex.bank - personal loans, you can complete formalities online and enjoy a paperless experience. 

You could also use the personal loan calculator available online to understand the repayment structure.  

Keep Personal and Finance Information, Handy

Lenders will require valid identification documents to verify name, age, and citizenship. A credit score is one of the critical factors considered when reviewing loan applications. It provides an insight into your credit history, debts and if you repay on time. As the credit score provided by different regulatory agencies may differ, it would be best to check the agency used by the lender.

Accurate submission of details and documents can speed up the personal loan review process.

Apply for the Personal Loan

You can start the application process for a personal loan by visiting the branch and filling in physical forms. You can also download these forms online, print, fill them up and drop them at the nearest branch. If you choose to work with a new-age digital bank, you can complete the application process online within minutes.

Some of the typical details you will have to provide are:

  • Personal information like name, address, contact, and valid identity proof such as passport or driver's license
  •  Financial information like credit score, monthly income, savings, expenses, debt, if any
  • Loan requirements such as amount, loan term, repayment frequency
  • You might have to upload documents like employment proof, payslips, and bank statements

What Comes Next?

The lender will run their credit and ID checks to verify the credibility of the data provided by you. If the lender offers a personalised interest rate, it will be determined according to their internal grading process. 

Your application will be reviewed within the mentioned stipulated time. If approved, the lender will notify you of the same and transfer the funds to your account. It is recommended you do not apply for multiple loans simultaneously, as they will pop up on your credit report.   

Thanks to technology and the growing importance placed on customer needs, getting a personal loan has become easy and quick. First, you should check the eligibility criteria for personal loans. Next, look at different products in the market and compare their repayment features.  

Prepare your personal and financial data beforehand to complete the application process without any hassle. With digital options such as alex.bank - personal loans, you can apply and get the loan without stepping out of your home.

Paula M. Graham | Paula is a writer and editor who works as a freelancer. She covers subjects such as banking, insurance, and digital marketing in his writing. Paula is a bookworm who also enjoys podcasts and freshly made coffee.

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