Do Banks Do Personal Loans? Uncover the Truth (2026)

Are you in need of quick funds but unsure where to turn? Whether it's for consolidating debt, funding a dream holiday, or covering unexpected expenses, personal loans can be a viable solution. But do banks offer personal loans, and are they the best option for you? Let's delve into the world of personal loans in Australia and explore your options.

Understanding Personal Loans

A personal loan is a fixed amount of money borrowed from a lender, which you repay with interest over a set period. These loans can be secured or unsecured, with the latter not requiring collateral. Banks, credit unions, and online lenders all offer personal loans, each with distinct terms and conditions.

Banks are a common choice for personal loans due to their established presence and often competitive rates. However, they may require higher credit scores and have more stringent approval processes compared to other lenders.

Current Market Rates and Requirements

As of 2026, personal loan interest rates in Australia range from 6.49% to 12%. These rates can vary significantly depending on the lender, the loan amount, and the borrower's creditworthiness. Banks typically offer rates at the lower end of this spectrum, especially for customers with strong credit histories.

When applying for a personal loan from a bank, expect to meet specific eligibility criteria. These usually include:

• A minimum credit score of around 650
• Proof of regular income
• Australian citizenship or permanent residency
• Being at least 18 years old

It's crucial to compare different lenders to ensure you secure the best deal. Here's a quick comparison of some typical offerings:

Steps to Secure a Personal Loan

Securing a personal loan can be straightforward if you follow these steps:

1. Assess Your Financial Situation: Before applying, review your finances to determine how much you can afford to borrow and repay.
2. Check Your Credit Score: Your credit score plays a crucial role in loan approval. Use a credit report service to check your score and address any issues if possible.
3. Research Lenders: Compare banks, credit unions, and online lenders. Use tools like Esteb and Co's lender panel to find competitive rates from over 83 lenders.
4. Prepare Documentation: Gather necessary documents such as identification, proof of income, and bank statements.
5. Apply for Pre-Approval: Some lenders offer pre-approval, giving you an idea of the loan amount and terms you might be eligible for.
6. Submit Your Application: Complete the application process by providing the required information and documents to your chosen lender.
7. Review and Accept the Offer: If approved, review the loan offer carefully, ensuring you understand the terms before accepting.

Tips and Considerations

Here are some expert tips to consider when applying for a personal loan:

• Shop Around: Don’t settle for the first offer. Use comparison tools to weigh up different options and find the best deal.
• Understand Fees: Look out for hidden fees such as application fees, early repayment fees, or late payment penalties.
• Consider Loan Features: Some loans offer features like redraw facilities or flexible repayments, which can be beneficial.
• Plan Repayments: Use a loan calculator to understand your monthly repayments and budget accordingly.
• Stay Informed: Keep up with market trends as interest rates and lending criteria can change.

Frequently Asked Questions

Here are some common questions about personal loans:

• Can I get a personal loan with bad credit? Yes, but expect higher interest rates and stricter terms. Some lenders specialise in loans for those with less-than-perfect credit.
• How much can I borrow with a personal loan? This varies by lender, but typically ranges from $2,000 to $100,000, depending on your creditworthiness and income.
• How long does it take to get a personal loan? Approval can take anywhere from a few hours to a week, depending on the lender and your preparedness.
• Are personal loans tax-deductible? Generally, personal loan interest is not tax-deductible, unless the loan is used for investment purposes.
• What happens if I miss a payment? Missing a payment can result in fees, increased interest rates, and a negative impact on your credit score.
• Can I pay off my personal loan early? Many lenders allow early repayment, but some may charge a fee. Always check the terms of your loan agreement.

At Esteb and Co, we understand that choosing the right personal loan can be daunting. With access to over 83 lenders, we are here to help you find the best option tailored to your needs.