How do I apply?

Applying for a personal loan is quicker and easier than you might think.

Find out whether you are eligible

Whether or not you are eligible to get a personal loan, and how much you can borrow, varies from lender to lender, from loan to loan.

At a minimum, you need to: 

  • Be at least 18, sometimes 21 or over
  • Be an Australian citizen or permanent resident, although some lenders do loan to people on temporary work visas such as 457
  • Be earning at least $25,000 per year, sometimes more, from a regular source of income that you can demonstrate
  • Have at least a provisional or full driver’s licence

Some lenders, although not all, will consider:

  • Applicants with existing loans or debt (there may be fewer options)
  • The self-employed, usually with additional criteria
  • People on a low income, the pension or Centrelink payments

Be sure you check the eligibility criteria for any lender you are considering to avoid impacting your credit score on an application you would never have been approved for.

What is the process

Once you have shortlisted lenders you can usually get a quote or estimate of your estimated borrowing power and some loan options, before you apply. 

Depending on the lender, you can then apply online, over the phone or in-person if the lender has physical branches. You’ll usually need to verify your identity, connect to your online banking to verify your income and expenses and potentially provide additional information based on your loan purpose.

If approved, you’ll need to accept your loan agreement. The majority of personal loans can be signed and accepted electronically.

What documents will you need

The documents lenders need to process your application vary, but usually it will include:

  • Proof of identification: Australian drivers licence or a passport and some bills for proof of your address
  • Verification of your income: payslips, bank statements or tax returns
  • Showing your expenses and liabilities: via bank, credit card and loan statements

Some lenders, such as Plenti, have a streamlined online portal, where you can connect to your bank and share your data securely. This makes the process much quicker and easier.

What will your lender consider

Your lender will review:

  • Your employment stability
  • Your income (e.g. salary, rent, interest, etc.)
  • Your expenses (e.g. mortgage, groceries, etc.)
  • Your repayment history
  • Credit agency/bureau information (credit report and score/rating)

These determine if you’ll be approved and for how much. If you’ve had problems paying your bills and debts in the past, you may only be offered loans at higher rates.

Improve your chances of getting approved

Applying for a personal loan has the potential to impact your credit score, particularly if your application is declined. Therefore, it's important that you put your best foot forward before beginning the application process. We’ve assembled a useful selection of tips to help you submit a strong loan application.

Make sure you pay your existing debts on time

Did you know that repayments that are more than 14 days late may be recorded on your credit file? While less serious than a default, a series of late repayments can have an equally negative impact on your credit score. Making late repayments also sends a bad message to a prospective lender and may result in you paying higher interest rates.

If you do ever find yourself behind on your repayments, it’s important you contact your lender directly. Working with your lender toward a mutually beneficial outcome can help to protect your credit score. Remember, it’s far easier to protect a good credit score than it is to improve a weak one.

Only request as much as you need to borrow

When assessing your application, a lender will look at whether you can service a loan. Essentially, this evaluates whether, after all your expenses, you have income left over to meet the repayments of your proposed loan. If you request an amount that is more than your finances suggest you are able to repay, it’s highly unlikely you will get approved.

In some cases, a lender may offer you a longer loan term to reduce your repayments, but it’s best to do your homework first. Use a repayment calculator and budget to figure out what you can reasonably afford.

Review your credit history

Australia has three main credit bureaus, Equifax, Illion, and Experian. You can request a free copy of your credit score once a year. Once you’ve verified your identity (i.e. with a driver’s license, passport etc.) the bureau is required to provide you with your credit report within 10 days. Your credit report will provide an overview of your credit history, including previous loans, existing debts, and your performance as a borrower.

You should ensure all the information contained in your credit report is accurate, and if not, contact the bureau to have it remedied. This will have a direct impact on your credit score. If you’re unsure of how to interpret your credit score, see this ASIC guide.

Pay down existing debts

Lenders may look unfavourably on an application for individuals with large amounts of debt, particularly if the debts are already at the limits of what they can afford. It’s important to demonstrate a concerted effort to repay your existing debts to a reasonable level. This applies even if your personal loan is for the purpose of consolidating your debt.

While a move to lower interest rates makes sense, it may be harder to get approved unless without opening up some additional capacity between your income and expenses.

Minimise your credit card balance

Using a credit card can be a great way to help boost your credit rating by demonstrating you are financially responsible. However, you need to manage your credit card carefully to ensure your balance is consistently low. Failure to make repayments can have an equally negative impact on your credit score.

Finally, lenders are now required to assess your application based on your credit card limits, not the outstanding balance. If you have unused cards or excess limit, look into reducing them before you apply for a new loan.

At Plenti, we assess your loan application in line with our credit criteria and our responsible lending obligations. Whilst no guarantee, following the tips above will go a long way to improving the prospect of successful loan approval.

You may have your personal loan approved within a minute, or it can take as long as a couple of weeks. Most digital lenders process and approve applications within 24 hours, provided all documents have been submitted. If you are approved, the funds will usually be deposited in your nominated everyday account or paid out directly to a nominated party (e.g. car dealer, credit card provider etc). This will generally take one business day.

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