Personal Loans Explained

A personal loan is a flexible credit product that allows you to borrow a fixed sum of money from a bank or non-bank lender for personal uses, such as buying a car, consolidating debt, or funding home renovations. Personal loan terms generally range from one to seven years, with interest rates offered on a fixed or variable basis depending on the product structure.

Personal loans can be either secured or unsecured. A secured personal loan requires an asset, such as a new or used vehicle, to act as collateral, which typically results in a lower interest rate. An unsecured personal loan does not require collateral, relying instead on your credit file, income, and serviceability to determine eligibility and pricing.

Repayments are structured on a weekly, fortnightly, or monthly basis. When assessing your application, Australian lenders review your credit history, employment status, and living expenses to establish your borrowing capacity. Total loan costs consist of the interest rate alongside establishment and ongoing fees, which are reflected in the comparison rate.

Finding the right loan structure and competitive rates can save you thousands over the loan term. A Lonix broker can compare options across a wide panel of Australian lenders and structure the loan to suit your financial circumstances.