‘How Much Can I Borrow?’ Your Guide to Personal Loans in Australia

Personal Loans in Australia

Ever thought to yourself ‘how much can I borrow?’ It’s not as complicated as you think, as the answer depends on the circumstances and the situation. To answer the question you need to figure out what personal loan you’re after and why.  While the loan amount you are entitled to is influenced by your present financial ability and the past record of credibility, it is also subject to the comfort and consideration of a lender. 

Easy to apply and quick to receive, personal loans have helped a lot of people in sticky financial situations. Whether you need money to pay for education, marriage, business, vacation, treatment, car repair or purchase of appliances or assets, personal loans are there to help you meet the need. A personal loan is defined as a credit amount provided to a borrower to meet his personal needs. The best thing is that it remains personal and not limited by spending conditions. You can use it for various purposes at your discretion. 

Personal loans in Australia have evolved with the change in the economic needs and financial behaviour of the borrowers. In Today’s age, bad credit doesn’t necessarily prevent you from accessing finance.  Personal loans are available for everyone, including those without a job or regular employment. However, it is the question of how much I can borrow that continues to impact your borrowing ability. But before we tell you all about personal loans and borrowing we’d better introduce ourselves first.  

How Much Can I Borrow

Introducing Safrock 

Safrock is an online lender-finder that everyday Aussies are turning to for personal loans. What’s a lender-finder you ask? let us fill you in. Were you a bit overwhelmed with the results when you googled ‘how much can I borrow?’ We don’t blame you! There are endless online lenders claiming to be the best when in actual fact they’re most likely not. That’s where Safrock comes in.  Basically we’ll do the searching for you. Just submit an application with us and we’ll do our best to find you a suitable lender for your needs. 

We can find loans ranging between $2,500 and $25,000 with flexible repayment options. So whether you’re looking for a quick financial pick me up or a larger sum for an important investment, we can find a lender providing loans for a whole range of purposes.  

How much can I borrow for a personal loan?

Ultimately, it is our goal to find a lender who can give you the amount you want to borrow. Typically online lenders are more lenient than traditional lenders such as banks when it comes to personal loans. We do however partner with lenders that adhere to responsible lending practices. 

We can find loans between $2,500 and $25,000. The amount of a personal loan on offer as well as the eligibility and conditions differ from lender to lender. Even interest rates vary given risk factors. So, the answer to how much I can borrow for a personal loan in Australia is dependent on your need, the ability to repay and the status of your income. Simultaneously, it is up to the lender to evaluate your suitability to extend a line of credit in the light of risk factors that put a limit on your borrowing capability. 

Here are the important factors that come into play as you calculate your general borrowing limit. 

    • Type of loans: Unsecured personal loans are typically of a smaller amount and do not require the borrower to attach an asset for security. Secured personal loans differ in that they do require the borrower to attach an asset for security.
    • Status of employment: The repayment of a loan is the biggest concern for a lender. This results in employment or regular income becoming a key factor in loan approval. A salaried person will probably have a better chance of getting a larger amount for their ability to repay while an unemployed individual is to face more scrutiny of his borrowing ability.
    • Income and earnings: How much you can borrow is usually subject to if you can afford the repayments. And the repayment ability is usually dependent on the income.
    • Expenses: Personal loan lenders seek bank statements to check your incomes and expenses. This is to make sure your spending habits and relationship with money won’t negatively affect your ability to make repayments.
    • Credit score: Most lenders will not assess your application solely on the basis of your credit score. That’s not to say it’s not an important factor in some cases, it is used to predict your financial behaviour based on past credit history. A good score makes you a candidate for a higher limit.
    • Lenders: The minimum and maximum limit linked to each loan product and risk calculation by lenders set the borrowing limit in each individual case.
    • Existing liabilities and debts: If you have already substantial liabilities and debts, this may affect the amount you can borrow from lenders. 

 

 

What’s the difference between a secured and unsecured loan?

A secured personal loan is merely a personal loan that needs to have an asset attached to it. When you apply for a loan, the lender may ask you to present collateral, such as property, stock, bond, or vehicle, as a guarantee against any failure to repay it. Thus, the loan is secured from any potential risk of default. Whereas, an unsecured personal loan does not have to be backed up by an asset or security. 

The answer to how much you can borrow lies in which type of loan you are applying for. If it is a secured personal loan, you are allowed to borrow a larger amount, as it is less risky for the lender. In case of any loan default, they have something to fall back and retrieve their money. This is typically only a last resort, however. 

Lenders take into consideration your income, credit score or social security payment as the basis for approving an unsecured personal loan. You don’t have to attach any collateral to this sort of loan. This restricts them to allow a higher limit for borrowing.  You can get unsecured loans even if you don’t own any asset to attach to the loan. The approval process is quick. However, interest rates for unsecured loans tend to be higher compared to secured loans and your application is just more on your creditworthiness and relationship with money.

Can I get a loan with bad credit?

Yes, it is possible to get a personal loan with bad credit. Though the amount of such a loan and the rate of interest may differ from one that is based on your credit history, still you have an option to apply and get a personal loan. You can find more details on how to calculate interest here.

There are many lenders who are willing to give personal loans for bad credit. Their products are specifically made to provide options to those with bad credit or no credit history. Such lenders took into account your ability to repay the loan, which is approved based on your income. Even a borrower’s Centrelink allowance is accepted as proof of regular income making a borrower eligible for a loan with no credit check. Safrock is proud to partner with lenders who offer bad credit loans and Centrelink loans. 

If you are contemplating how much I can borrow with bad credit, you must know that it is your income that fixes the amount. 

Do personal loans hurt your credit score?

A personal loan application is likely to cause a short-term, slight dip in your credit score. Once you apply for a loan, the lender does a hard check of your credit history. This involves digging deep into your financial history and an extensive inquiry for liabilities. Loan applications account for 10% of a credit score and any review required by such an application indicates that your financial position is not strong. It is recorded on your credit score indicating an upswing in the debt. As a result, the credit score loses a few points. But this is a temporary change and it recovers as you start paying the loan, as a third of your credit score is driven by your loan repayment. 

However, multiple credit checks over a short period of time could cause a larger dip in your credit score. To avoid it, use online lender findings, such as Safrock, that match you with a suitable lender for your situation. Once you are in touch with the preferred lender, ask how much I can borrow based on the credit score. 

Where can I borrow money fast?

Looking for a quick personal loan? Apply through online lender finding services. For example, Safrock enables you to find and receive personal loans between $2,500 and $25,000 fast and with minimal search. All that you need is to fill in your details. The site helps you get a list of lenders willing to extend you a line of credit and a comparative analysis of fees, charges, benefits and interest rate to empower your loan decision. 

How to apply

The Safrock process can be broken down into 3 simple steps. these are:

Step 1: Apply online 

Scroll up to the top of this page and use our loan calculator to input the amount you’d like to borrow and the repayment period and hit ‘Apply Now’.  You’ll then be taken to our online application form which could take you just a few minutes to fill out. 

Step 2: Meet your match

Once you’ve submitted your application, we’ll take it from here. Our team gets to work on finding you a suitable lender. If we find you a lender to match your circumstances we will send them your application. 

Step 3: Get your cash

Your lender will then assess your application. From there, processing times depend on each individual lender. If you’re approved, you’ll be sent an online agreement for you to review and sign. We suggest reading this carefully to make yourself aware of any fees and charges for late or missed payments. Once you’re happy, sign your agreement and send it back to your lender. You should receive your cash shortly after that (transfer times differ depending on each lender and what time you apply).

Get more finance news from Safrock. Learn more about collateral loans and loan rates.

Looking for fast easy loans? Find your match with Safrock!