About Small Personal Loans in Australia

If you’re strapped for cash, getting a small personal loan will address your money issues. It’ll allow you to pay for anything you want, whether your medical bills or your future vacation.

But where exactly can you get small personal loans in Australia? More importantly, how much will it cost you, and when can you expect to get the money?

This article will provide all the details you need. So read on to learn more about small personal loans in Australia.

What this article covers:

What Are Small Quick Personal Loans?

A small personal loan is an unsecured loan typically capped at $2,000 but may go up to $5,000.

Since the loan amount isn’t particularly large, you can usually get approved for this loan quite fast. However, you’ll also be required to repay the loan relatively quickly. 

small personal loans australia

Generally, they must be repaid in under a year. Occasionally, however, you can get up to two years. 

That’s why small personal loans are also known as “short-term instant loans” or “cash loans”. 

Considering it’s a personal loan, there are no restraints on how you should use the money. Whether you want to buy a new TV or pay a medical bill, you can do whatever you want. 

But what’s the price of such a loan? Well, let’s take a look. 

How Much Do Small Personal Loans Cost in Australia?

To prevent exploitation, the government regulates all loans in Australia. Their fees and interest rates have certain limits that can’t be crossed. 

According to the ASIC, all loans equal to $2,000 or less can’t have more than a 20% establishment fee and a 4% monthly fee. 

Accordingly, if you borrow $1,000 to be repaid in 3 months, the most you’ll be expected to pay is:

  • Establishment fee: $200
  • Monthly maintenance fee: $120 ($40 x 3)
  • Total: $1,320 
  • Payment on a fortnightly basis: $188.57 (7 payments)

As for personal loans from $2,001-$5,000, loan providers will take out the monthly maintenance fee in lieu of an interest rate. 

small personal loan australia

You’ll still be expected to pay an establishment fee, which is $400 in most establishments. As for the interest rate, it’s capped at 48% p.a. of the principal. 

Note: Take care that lenders may charge you late or default fees if you fail to make your payments on time. A single late payment fee can go up to $7 per day, which isn’t cheap. So, make sure you never delay or miss any payment, or else you’ll only be making your debt larger.

Can You Get Small Personal Loans from a Bank?

Small bank loans typically start from $5,000. While that may not be an issue to most people, the bigger loan amount can be financially stressful to some. And while a bank can offer you the most competitive interest rates, you need to have an impeccable credit score to qualify for the loan. 

As such, they are not for everyone. 

However, if you’re looking to borrow under $5,000 or have a less-than-perfect credit score, you should forsake the bank and head to a private money lender. 

What Are the Eligibility Criteria of Small Personal Loans?

To get small personal loans, you simply need to:

  • Be a citizen or permanent resident of Australia
  • Be at least 18 years of age
  • Have had a steady job for the past 3-months
  • Have an active bank account, email, and phone number

small bank loan

How to Apply for a Small Personal Loan in Australia 

The first thing you should do before applying anywhere is to compare the available loans. While the establishment/ monthly fees are fixed, some lenders may offer lower interest rates or late payment fees. Some lenders may impose an early repayment fee, while others may not. 

As such, you must thoroughly research the available lenders to find the best deal. 

Once you do, you simply need to fill out an online application. In this application, you’ll state your personal information and how much money you’d like to borrow. 

The lender will then review your application and call you to confirm your details and get more information. If all is to his liking, the lender will send you the loan contract to sign. Once that’s done, the money will be sent to your bank account.

Information and Documents Needed for a Small Personal Loan Application

Most loan applications require that you share the following:

  • A copy of your ID
  • Personal details such as your email, address, and phone number
  • Employment details 
  • Proof of income (payslip or income statement)
  • 90-day history of your bank transactions

small quick personal loans

Generally, lenders don’t consider Centrelink payments as a stable source of income. As such, they will point-blank refuse to deal with Centrelink clients, especially when their Centrelink payments make up more than half of their total revenue. 

But that’s not always the case with these loans.Since small loans are usually under $2,000, some lenders believe a Centrelink income will be enough for the repayments. 

So, if you’re a Centrelink recipient, don’t lose hope of getting a small personal loan. While your loan application may get rejected a few times, you’ll eventually find a lender who’s a-okay with Centrelink payments.

Can You Get a Small Personal Loan with Bad Credit?

Yes, there is such a thing as personal loans for bad credit, but not every lender offers them. 

Loan providers run a credit check on you to gauge your risk as a client. The lower your score, the riskier you are, and vice versa. 

However, some lenders occasionally overlook your credit score if your financial situation isn’t too bad. 

If they find your income and current expenses balanced enough to handle your loan repayments, they’ll let you take out the loan. But they’ll most likely impose the highest possible fees and interest rates. So, keep that in mind when asking for a loan on bad credit. 

small cash loans low interest

How Long Does It Take to Be Approved for Small Quick Personal Loans?

Personal loans are sometimes dubbed fast personal loans or instant personal loans. 

Once you submit your application, most lenders can approve and fund your loan in no more than an hour. 

The only exception to this would be when you apply after business hours or on weekends. Nevertheless, you should still receive a response by the following business day. 

Can You Have Two Personal Loans at the Same Time?

Though it’s not guaranteed with all lenders, it is possible to have two personal loans simultaneously. However, keep in mind that this may not be the best way to get extra funds. 

Taking out multiple personal loans in a short period can lower your credit score. You’ll also be financially strained since you’ll have numerous loan payments to fulfil. 

So, if the second loan isn’t too urgent, it’s best to wait until you finish repaying the first loan. 

Are There Alternatives to a Small Cash Loans With Low Interest?

If you’re unable to get a small personal loan due to bad credit, you can try to get:

  • A NILS loan 
  • A Centrelink advance payment 

small cash loans

A NILS loan allows you to borrow $1,500 or more without interest. This is to help struggling Australians pay for essentials such as medical bills, car repairs, etc. However, to qualify for a NILS loan, you must either:

  1. Have a Health Care Card
  2. Have a Pensioner Concession Card
  3. Make less than $45,000 after tax deductions. 

Meanwhile, Centrelink advance payments are available to any Centrelink recipient. As the name implies, you’ll get a few weeks of payments in advance with no interest. Just keep in mind that your future Centrelink payments will be dramatically reduced until the debt is repaid. 

Conclusion 

Small personal loans in Australia are a huge commodity. Not only are the fees carefully regulated, but you can also get personal loans online with instant approval. 

While a bank can offer you more competitive rates, it rarely offers loans under $5,000. Moreover, it won’t accept bad credit or Centrelink clients.  

A small personal loan from a private money lender will usually be your best, and sometimes only, choice. 

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