How to get a personal loan in Australia comes down to seven steps: work out what you need and can repay, check what lenders look for, gather your documents, compare the full cost, apply, read the contract, then plan your repayments. Each lender sets its own criteria and makes its own decision.
This guide walks through each step, including what a lender has to check by law and what MoneyBuddy currently asks for. It also covers where to get help if repayments become hard later on.
Last reviewed: 21 October 2026
The seven steps at a glance:
- Work out what you need and what you can repay.
- Check what lenders look for.
- Gather your documents.
- Compare the full cost, not just the rate.
- Apply, and expect the lender to check your details.
- Read the offer and contract before you sign.
- Plan your repayments.
Step 1: Work out what you need and can repay
Start with what the money is for. A clear purpose makes it easier to choose the right loan and to avoid borrowing more than the job needs.
Next, figure out exactly how much you need to borrow. Price what you're paying for and skip the "bit extra" for other things, because a bigger loan usually means more interest and fees.
To see the other side of that question, our guide to how lenders work out what you can afford explains how they decide the amount they can offer.
Then look at your budget. List your income, regular bills, everyday spending and the repayments you already make, so you can see what's left each pay cycle.
That leftover amount is the realistic ceiling for a new repayment, with some room spare for surprises. If there's little or nothing left, a loan may add pressure rather than solve the problem.
It's also worth checking your credit report before you apply, so you can spot errors or debts you'd forgotten about. Credit reporting bodies must give you your report free once every three months, and the OAIC notes they may hold different information, so you may need more than one report.
Step 2: Check what lenders look for
Every lender sets its own criteria, so no single checklist applies everywhere. In general, lenders look at:
- your age and residency status
- a regular income the lender can verify
- your living expenses and the repayments you already make
- your credit history, including any missed payments or defaults
A lender may ask for identity documents, such as a driver licence or passport. The exact documents and verification process depend on the lender.
Meeting a lender's published criteria doesn't mean an application will be approved. The lender still has to assess your situation, which Step 5 explains.
If you're a student looking to borrow, our guide covers the options and what lenders look at in that situation.
What MoneyBuddy currently asks for
MoneyBuddy's criteria are listed separately here because other lenders set different ones. At the time of writing, MoneyBuddy asks that you:
- are 18 or older
- are resident in Australia
- have a regular income that meets MoneyBuddy's current eligibility criteria
- can provide photo ID, such as a driver licence or passport
- have an Australian bank account for the money and the repayments
- have a mobile number and an email address
MoneyBuddy may also ask to see recent bank statements, and it checks your credit file as part of lending responsibly. These criteria can change, so check the current requirements before you apply.
Step 3: Gather your documents
Having your documents ready before you apply can save back-and-forth later. What a lender asks for depends mostly on how you earn your income.
The table below lists examples from ASIC's guidance for lenders. A lender won't necessarily ask for all of them, and some may ask for others.
| Document a lender may ask for | Usually for |
|---|---|
| Recent payslips | Employees |
| Bank statements showing your income | Most applicants |
| Recent tax returns | Employees, self-employed |
| Business Activity Statements | Self-employed |
| A statement from your accountant | Self-employed |
| Centrelink statements | Government payments |
| Statements for other loans and cards | Anyone with debts |
Source: ASIC Regulatory Guide 209, Tables 1 and 2. These are examples, not a fixed list.
If you work casual or seasonal hours, a lender may want documents covering a longer period to see how your income varies. For employees, it may also confirm your employment with your employer.
Small loans come with an extra check. For a small amount loan of $2,000 or less, the lender must review at least 90 days of transactions on the account your income is paid into.
Our guide to the extra rules for small loans explains how that works and what else applies to them.
Step 4: Compare the full cost
Two loans for the same amount can cost very different totals. Look at each of these separately before you compare offers:
- Interest rate: the yearly rate charged on what you owe. Your contract shows it as the annual percentage rate.
- Comparison rate: one rate that includes the interest rate and most fees, but not necessarily every possible cost. It's worked out for an example amount and term, so your own loan may differ.
- Fees: such as an establishment fee, ongoing monthly fees, late payment fees and any fee for repaying early.
- Loan term: how long you have to repay. A longer term can lower each repayment but usually increases what you pay overall.
- Total repayment: everything you'll pay over the life of the loan, including interest and fees. It shows the full cost of borrowing in dollars.
You'll also see secured and unsecured loans. A secured loan uses an asset, such as a car, as security, while an unsecured loan doesn't, and lenders usually price the two differently.
Rates can be fixed, staying the same for the term, or variable, moving up or down over time. With a variable rate, your repayments can change.
To test different amounts and terms, try Moneysmart's calculator. It can estimate repayments and an indicative borrowing amount from the figures you enter, but it's a model rather than a prediction, and it doesn't assess whether you can afford the loan.
Step 5: Apply and expect checks
Knowing how to apply for a personal loan is mostly about being prepared. The form usually asks for your personal details, income, expenses, existing debts and the reason for the loan, and the lender will check what you tell it.
By law, a licensed lender must make reasonable inquiries about your requirements and objectives and about your financial situation. It must also take reasonable steps to verify that information, for example with the documents from Step 3.
The lender then assesses whether the loan would be unsuitable for you. Under the National Credit Act, it's unsuitable if you likely couldn't make the repayments, or could only make them with substantial hardship, or if it won't meet your requirements and objectives.
This check is there to stop lending that's clearly wrong for you, but it isn't a promise that a loan suits you. You still decide whether the repayments and total cost work for your budget.
The lender will also check your credit report, and the application is recorded as a credit enquiry. According to the OAIC, credit enquiries stay on your report for five years.
Depending on what it finds, a lender may ask for more information, offer a different amount or term, or decline the application. If you're declined, it's worth asking why before you apply anywhere else.
Step 6: Read the offer and contract
If you're offered a loan, you'll receive a contract to review before you sign. It's legally binding, so give yourself time to read it properly.
The contract must state the annual percentage rate, the credit fees and charges and when they're payable, and the amount of each repayment or how it's calculated. Check each one against what you expected from Step 4.
Also look for:
- the total amount you'll repay
- when each repayment is due
- what happens if you miss a repayment, including any default fees
- whether you can make extra repayments or repay early, and any fee for doing so
If anything is unclear, ask the lender before you sign. You should also receive a credit guide, which gives you basic information about the lender.
ASIC says you can request a free copy of the written assessment when a lender enters into the credit contract, or when a credit assistance provider gives credit assistance. The request can be made within seven years, although the time allowed for providing it depends on when you ask.
Step 7: Plan your repayments
Once the money is in your account, set up your repayments so none are missed. A direct debit or an automatic transfer timed for just after payday can help.
If you can afford to, extra repayments may reduce the interest you pay. Check your contract first, because some loans charge a fee for repaying early.
A budget makes repayments easier to keep on track, and our money-saving tips guide has ideas for freeing up room each month.
If repayments become hard, contact your lender early. You can give it a hardship notice, by phone or in writing, explaining that you can't meet your repayments, and ask about changing the arrangement.
Free, confidential help is also available from the National Debt Helpline on 1800 007 007. Its financial counsellors can talk through your options with you.
Common mistakes to avoid
A few avoidable mistakes can make a loan cost more than it needs to:
- Comparing only the interest rate: fees and the loan term change the total cost.
- Looking only at the repayment amount: a smaller repayment over a longer term usually means paying more overall.
- Borrowing more than you need: extra borrowing means extra interest and fees.
- Leaving out debts or expenses: the lender checks what you tell it, so missing details can slow things down or change the outcome.
- Signing without reading the contract: it's binding, so check the rate, fees and repayments first.
Is a personal loan the right fit?
A personal loan can make sense for a planned expense when the repayments fit comfortably in your budget. If they don't, it may be worth looking at other options first, such as a payment plan with the business you owe or a No Interest Loan for essentials.
Whatever you decide, take your time and compare the full cost before you commit. A loan that suits your budget today should still suit it when the last repayment is due.
This article is general information only and does not take your personal circumstances into account. It is not financial advice. Consider whether a product suits you and read the loan terms before you apply.
Frequently asked questions
Lenders usually ask for identity documents, evidence of a regular income, details of your expenses and debts, and a bank account in your name. Each lender sets its own list, so check its requirements before you apply.
A lender must not offer a loan that would be unsuitable, for example if you likely couldn't make the repayments without substantial hardship. Its own criteria, such as age, residency and income, also apply.
You borrow a set amount and repay it, plus interest and any fees, in regular repayments over an agreed term. The contract states the annual percentage rate, the fees and the repayments.
Yes, the application is recorded on your credit report as a credit enquiry. Credit enquiries stay on your report for five years.
Many lenders consider self-employed applicants if they can verify the income. A lender may ask for documents such as recent tax returns, Business Activity Statements or a statement from your accountant.
The MoneyBuddy Team
MoneyBuddy Australia
Helping Australians access fair, transparent small loans since day one. Our team creates practical guides to help you make smarter borrowing decisions.
