Need Small Loans in Australia? We’ve Got You Covered!

Sudden expenses like needing to change a broken appliance or going on a last-minute trip can be a bother. So, when searching for a small loan in Australia, it might seem like your options are limited if your bank refuses to lend you the required amount.

While Australian small loans have a cap of $2,000, the limit can extend to $5,000 for some lenders. You can even get a $100 loan instant in Australia if you need. These micro loans are paid the same day as the application, so your expenses don’t have to wait.

We know you have questions about small loans in Australia and how you can get approved for one, so here are the answers!

What this article covers:

What Is Considered a Small Loan in Australia?

A small loan, by definition, is a loan of an insignificant amount of money. It can be as small as a couple of hundred dollars, like a $200 loan. You can pay it back between 16 days and 12 months, depending on your financial situation.

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It’s a personal, unsecured loan, which means you:

  1. Can spend the money on anything you want, unlike a car loan or medical loan that finances a specific expense.
  2. Don’t have to sign an asset as a security for your loan that can get repossessed if you fail to pay the instalments.

Small cash loans in Australia can be up to $2,000, although some lenders extend that ceiling to $5,000.

What Are the Requirements for a Small Loan in Australia?

Before you apply for a small loan, make sure you have the minimal requirements of approval:

  • You’re over 18 years old.
  • You’re an Australian citizen or a permanent resident.
  • You’ve had a stable source of income for the past 90 days.

Then, you’ll need to provide information that would help the company find you a lender. This information includes:

  • Photo identification: passport, driver’s licence, or both.
  • Bank statements for the past 90 days.
  • Centrelink statements if you receive payments.
  • A recent utility bill as proof of address.

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Lenders also ask for one-time access to your online banking accounts to view your statements. If you don’t use online banking or don’t have the information handy, you should find it before you apply for a small loan to make the process faster.

However, you should only provide your online banking credentials to a trusted source that guarantees secure handling of your information. 

How Can I Get Approved for a Small Loan in Australia?

There are a few ways you can improve your chances of getting approved for a small loan with bad credit:

Borrow Within Your Means

Although reputable lenders exercise a responsible lending policy based on Australian law, it’s ultimately your duty to keep the borrowed amount within your means. 

The amount you can borrow is bound by your disposable income. So, the monthly instalments for your small loan shouldn’t exceed a quarter of the money you don’t use to pay bills or other living expenses.

Avoid Multiple Applications

You might be thinking that filling out several applications for a small loan might help you get funds faster, but this isn’t a wise plan. 

Every time you apply for a loan or a line of credit and get rejected, it shows on your credit report, adversely affecting your credit score. This ends up lowering your chances of being approved for a loan or credit.

You should put all your effort into your first application and wait for a result. If rejected, then you should find ways to improve it to maximise your chances of being approved.

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Request Your Credit Report

Knowing where you stand financially can help you make better decisions when it comes to borrowing. That’s why you should request your credit report from one or more of the three credit reporting agencies (Experian, Illion, and Equifax) and take a look at it.

You can get online access to your credit report within 1-2 days of the request, or wait up to 10 days for a copy to reach you via physical mail or email.

Keep in mind that each file may contain different information depending on the credit reporting agency and how often the report gets updated, so you should probably check all three out.

Is a Small Loan in Australia the Same as a Payday Loan?

Small loans in Australia are similar to payday loans, meaning both types have similar conditions and requirements. The biggest difference is that payday loans usually have a shorter payment period that extends to 180 days (6 months) only.

That said, you should be aware that little loans in Australia are legally under the same umbrella. These terms are flexible and most companies have their definitions of what they consider a small loan or a payday loan.

Recently, more companies are forgoing the term “payday loan” because it has a bit of an unpleasant reputation. Most people associate it with a lack of transparency, changing rates, and predatory lending. That’s not the case for every small loan company, though.

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Conclusion

Taking out a small, easy loan in Australia shouldn’t be a challenge. All you have to do is provide proof you’re of legal age, an Australian citizen or permanent resident, and have had a stable income for 90 days. A photo ID and proof of residence are also required.

Reputable lenders perform a quick check to ensure your eligibility for the small loan as soon as you apply. If approved, the funds are transferred to your bank account or in person within hours or days of the application.

In case of a rejection, you should probably request a copy of your credit report to know what’s behind it. Applying right away for another small loan would probably end in another rejection, and your credit score could bear the brunt.

Was the guide helpful? Check out these extra resources to delve deeper: