Loan at 17? Here's How to Secure Funds Legally

Are you a young Australian wondering if you can apply for a loan at 17? Perhaps you're looking to invest in your first car or need funds for another significant purchase. Understanding the landscape for minors seeking loans can be complex, but this comprehensive guide will help you navigate your options and provide actionable advice to get started on the right foot.

Understanding Applying for Loans at 17

In Australia, the legal age to apply for a loan independently is 18. This is because individuals under 18 are considered minors and are generally not able to enter into legally binding contracts. However, there are alternative routes and solutions if you're 17 and in need of financial assistance.

One common solution is to apply for a loan with a guarantor, usually a parent or guardian. The guarantor agrees to take responsibility for the loan if you are unable to make payments. This arrangement provides the lender with a level of security that they require to approve the loan.

Key Information for Young Borrowers

Understanding the terms and requirements for loans available to young borrowers is crucial. Here, we'll break down the key information you need to know, including interest rates, eligibility criteria, and available options.

Interest rates for loans can vary widely based on the type of loan and the lender's risk assessment. In 2026, interest rates for personal loans in Australia range from 6.49% to 12%, depending on your credit score, employment status, and whether you have a guarantor.

Eligibility criteria for young borrowers typically include:

• Having a stable source of income, such as part-time work or a regular allowance.
• Providing a guarantor, usually a parent or guardian.
• Having a good credit history, which can be challenging for young borrowers who have not yet established credit.

Options available to 17-year-olds include:

• Guarantor loans, which involve a parent or guardian co-signing the loan.
• Secured loans, where an asset is used as security against the loan.
• Alternative financing options like peer-to-peer lending or family loans.

How to Apply for a Loan at 17

Applying for a loan at 17 requires careful planning and preparation. Here are the steps to guide you through the process:

1. Evaluate Your Needs: Determine the amount you need to borrow and the purpose of the loan.
2. Research Lenders: Look into various lenders, including those on the Esteb and Co panel of 83+ lenders, to find the best terms and rates.
3. Prepare Your Documents: Gather necessary documentation, including proof of income, identification, and any information required from your guarantor.
4. Discuss with a Guarantor: If needed, discuss the loan terms with your parent or guardian and ensure they understand their obligations.
5. Submit Your Application: Apply to your chosen lender, providing all required documents and information.
6. Review and Sign the Loan Agreement: Once approved, carefully review the loan agreement and ensure both you and your guarantor understand the terms before signing.

Tips and Considerations

Here are some expert tips and considerations to keep in mind when applying for a loan at 17:

• Build Your Credit: Start building your credit as early as possible by managing any small accounts responsibly.
• Understand the Risks: Be fully aware of the risks involved in taking a loan, especially the implications for your guarantor.
• Budget Wisely: Create a budget to ensure you can comfortably meet loan repayments without financial strain.
• Seek Professional Advice: Consider consulting with a financial advisor or a mortgage broker from Esteb and Co to explore your options.
• Consider Alternatives: Explore alternative funding sources like scholarships, grants, or family loans that might be more suitable.

Frequently Asked Questions

Can I apply for a loan without a guarantor?

Most lenders require a guarantor for borrowers under 18, but some may offer loans if you have a stable income and excellent credit.

What are the risks for the guarantor?

The guarantor is responsible for repaying the loan if you default, which can affect their credit score and financial standing.

How can I improve my chances of loan approval?

Improve your credit score, have a stable income source, and choose a reliable guarantor to enhance your approval chances.

Are there specific lenders that cater to young borrowers?

Some lenders specialise in loans for young borrowers. Research thoroughly or consult with Esteb and Co for guidance.

Is it better to save rather than borrow?

If possible, saving is a safer option as it avoids debt and interest payments, but borrowing might be necessary for urgent needs.

What happens if I miss a payment?

Missing a payment can lead to penalties and affect your credit score. Communicate with your lender immediately if you face difficulties.

Can I refinance the loan later?

Yes, once you turn 18 and establish a better credit profile, refinancing to secure better terms may be an option.