Personal Loan? Secure Your Home Loan Fast (2026)

Securing a home loan is a major financial commitment and can be challenging at the best of times. However, if you’re already managing existing debt, such as a personal loan, the task might seem even more daunting. The good news is that securing a home loan while having a personal loan is possible with the right strategy and planning.

Understanding Home Loans and Personal Loans

Before diving into the specifics, it’s important to understand the fundamental differences between home loans and personal loans. A home loan, or mortgage, is specifically designed to help you purchase a property. It typically has a longer term, often up to 30 years, and usually comes with a lower interest rate compared to personal loans. Personal loans, on the other hand, are unsecured loans with shorter terms, often between one to seven years, and higher interest rates. They can be used for various purposes, from consolidating debt to funding a holiday or even home renovations.

Current Market Information and Requirements

In 2026, the Australian financial landscape is competitive, with interest rates for home loans ranging from 4.5% to 6.75% depending on the lender and your financial circumstances. Personal loan rates typically fall between 6.49% and 12%. When applying for a home loan with an existing personal loan, lenders will assess your financial situation to determine your ability to manage additional debt.

Below is a comparison table highlighting key differences:

Eligibility criteria for a home loan when you have a personal loan include having a stable income, a good credit score, and a manageable debt-to-income ratio. Lenders, including the 83+ that Esteb and Co partner with, will look at these factors closely.

Steps to Secure a Home Loan with a Personal Loan

1. Assess Your Financial Situation: Start by evaluating your current financial status. Calculate your total debt, monthly repayments, and income. Ensure your debt-to-income ratio is favourable.
2. Improve Your Credit Score: A higher credit score can enhance your chances of securing a loan. Make sure to pay bills on time and reduce unnecessary debts.
3. Consult a Mortgage Broker: A mortgage broker from Esteb and Co can provide invaluable assistance in navigating lender requirements and identifying suitable loan options from their extensive panel.
4. Reduce Your Debt: If possible, pay down your personal loan to reduce your overall debt burden. This can improve your debt-to-income ratio and make you more attractive to lenders.
5. Provide Comprehensive Documentation: Be prepared to supply detailed documentation of your income, employment history, and existing debts to support your application.
6. Choose the Right Lender: Use the expertise of your mortgage broker to select a lender who understands your situation and offers competitive rates.

Expert Tips and Considerations

• Consider Debt Consolidation: If you have multiple high-interest debts, consolidating them into a single loan with a lower interest rate can reduce your monthly payments and improve your financial profile.
• Budget Effectively: Create a realistic budget that accounts for all expenses, ensuring you can comfortably manage repayments.
• Stay Informed: Keep up with market trends and interest rate changes. This knowledge can help you negotiate better terms with lenders.
• Build a Savings Buffer: Having extra savings can provide security and demonstrate financial responsibility to lenders.

Frequently Asked Questions

1. Can I get a home loan if I have a personal loan?
   Yes, it's possible. Lenders will assess your overall financial situation, including your debt-to-income ratio and credit score.
2. Will having a personal loan affect my ability to borrow?
   It can impact your borrowing capacity, but reducing your debt and improving your financial profile can help.
3. Should I pay off my personal loan before applying for a home loan?
   While not always necessary, doing so can improve your financial standing and increase your borrowing power.
4. Do all lenders consider personal loans when assessing home loan applications?
   Most lenders will consider all existing debts, but the criteria can vary, which is where a broker can be helpful.
5. How can Esteb and Co assist in this process?
   With a panel of over 83 lenders, Esteb and Co can help identify the best home loan options tailored to your financial situation.
6. What should I do if my home loan application is denied?
   Review the reasons for denial, address any issues, and consider reapplying or seeking guidance from a mortgage broker.