Loan Under 18? Discover Approval Options Fast (2026)

Are you under 18 and wondering if you can take out a loan in Australia? Perhaps you're eager to start a small business, buy your first car, or fund your education. Navigating the financial landscape as a minor can be challenging, and understanding your options is crucial. The good news is that while taking out a loan under 18 is uncommon, there are avenues you can explore to help you achieve your financial goals.

Understanding Loans for Minors

In Australia, the law generally requires individuals to be at least 18 years old to enter into a legally binding contract, including a loan agreement. This stems from the principle that minors (under 18) lack the legal capacity to commit to such contracts. However, there are exceptions and alternative methods that can be considered.

One potential route is through a guarantor loan, where a parent or guardian co-signs the loan. They essentially take responsibility for the loan repayments if you are unable to meet them. Additionally, some financial institutions offer special programs aimed at young people, though these often come with specific conditions.

Key Information for Minors Seeking Loans

Let’s dive into some of the key rates, requirements, and options available in 2026 for those under 18 looking to secure a loan.

Interest rates for loans with a guarantor tend to be slightly higher due to the increased risk. As of 2026, you can expect rates ranging from 6.49% to 12%, depending on the lender and the type of loan.

Eligibility criteria generally include:

• Having a stable income source, such as part-time work or a side business.
• A parent or guardian willing to act as a guarantor.
• Being able to demonstrate financial responsibility, such as a savings history.

The following table provides a comparison of some options available through Esteb and Co’s panel of 83+ lenders:

How to Secure a Loan Under 18

If you're determined to secure a loan under 18, here are some practical steps you can take:

1. Discuss with a Guardian: Have an open conversation with your parent or guardian about your financial goals and the possibility of them acting as a guarantor.
2. Assess Your Financial Situation: Evaluate your income, expenses, and savings to determine how much you can afford to borrow and repay.
3. Research Lenders: Use resources like Esteb and Co to compare options from various lenders on their panel. Look for terms that best suit your needs.
4. Prepare Documentation: Gather necessary documents such as proof of income, identification, and any required consent forms.
5. Apply for the Loan: Submit your application through your chosen lender, ensuring all information is accurate and complete.
6. Understand the Terms: Before signing, make sure you and your guarantor understand the loan terms, including interest rates and repayment schedules.

Tips and Considerations

Here are some expert tips to consider when seeking a loan as a minor:

• Build a Strong Savings Record: Demonstrating a consistent savings habit can strengthen your application.
• Leverage Educational Resources: Consider taking a financial literacy course to improve your understanding of managing money and loans.
• Explore Alternatives: Look into scholarships, grants, or community programs that might offer financial assistance without the need for a loan.
• Plan for the Future: Consider how taking out a loan now might impact your financial situation in the future, especially if you plan to study further or make significant purchases.

Frequently Asked Questions

1. Can I get a loan without a guarantor if I'm under 18?
   Typically, no. Most lenders require a guarantor for underage applicants due to legal and financial reasons.
2. What is the minimum age for a guarantor in Australia?
   The guarantor must be at least 18 years old and meet the lender’s financial criteria.
3. Are there specific loans available for young entrepreneurs?
   Some lenders offer youth entrepreneurship programs, but these often require a solid business plan and a guarantor.
4. Can I use my part-time job income to qualify for a loan?
   Yes, having a part-time job can help demonstrate financial stability, which might improve your chances of obtaining a loan with a guarantor.
5. How can I improve my chances of getting approved?
   Maintaining a good savings record, securing stable income, and having a supportive guarantor can significantly improve your loan application.
6. What happens if I can't repay the loan?
   If you default, the guarantor becomes responsible for repayments, which can impact their credit score and financial standing.
7. Can I apply for a loan with multiple guarantors?
   Some lenders may allow multiple guarantors to share the responsibility, but this depends on the lender’s policies.