What is a Small Loan?
What is a small loan, how do they work, and what credit score do you need to have to be eligible? We’ll answer these questions and more so you can find out everything you need to know about small personal loans in Australia.
Overview:
- What is a small loan?
- What is the smallest personal loan you can get?
- How does it work?
- Where can you get a small cash loan?
- How long does it take?
- How can I get a loan immediately?
- What credit score is needed for a small personal loan?
- How to apply
- What is the easiest small loan to get approved for?
- Easy small personal loans up to $5,000
What is a small loan?
A small loan can refer to a small personal loan or a small business loan. It allows you to borrow a lump sum amount of money and pay it off in instalments over a set period of time. In addition to the initial loan amount, you will also need to pay interest and any other fees associated with the loan.
What is considered a small personal loan?
Small personal loans, also commonly referred to as payday loans or secured loans, are generally characterised by amounts under $5,000.
What is the smallest amount you can get?
The smallest amount of money you can borrow will depend on what lender you apply with. Some Australian lenders start as low as $200, while others start at $2,000 or higher.
How does it work?
When you take out a small personal loan you will receive a lump sum of money. Unlike other types of loans, that require you to use the money for a very specific purpose, the money can be used for whatever you need it for. You will then have to start making recurring payments on your loan until you have repaid the loan amount, plus interest and other fees.
Be aware that there are strict rules around what lenders can charge for small loans in Australia. Loans of $2000 or less have different rules than loans from $2,001-$5,000.
Where can you get a small cash loan?
There are fewer and fewer brick-and-mortar loan stores available in Australia. But the good news is that there are lenders that allow you to apply online from anywhere at any time and get your loan sorted.
Do banks give small loans?
Some banks offer small loans in Australia, often starting around $4,000.
Traditional bank lenders tend to be more strict with their lending criteria than other types of private or direct lenders in Australia. This can be fine if you have a good credit history and borrowing power. But if you have made some credit mistakes in the past, you may need to seek out an alternative lender.
How long does it take?
You can get a loan in as little as 1 hour, depending on the lender you apply with.
Some factors that commonly influence the speed of approval include:
- How early in the day you apply
- If the assessor needs to follow up for more information
- If you have a more tricky credit profile
- Whether the loan is secured or unsecured
How can I get a loan immediately?
There are several things that can improve your chances of quick loan approval. Check out our 10 best tips for how to get a loan urgently to learn how to speed up the application and approval process.
What credit score is needed for a small personal loan?
Most Aussie lenders will want you to have a good credit score of around 600 or higher. Some lenders offer bad credit or very bad credit loans to people who have low credit ratings but are currently able to service the loan.
What is classed as a ‘good credit score’ varies depending on the credit bureau. Learn how to check your credit score so you know what lenders will see when you apply for a personal loan. Not all lenders will use the same credit reporting agency, so it’s good to know where your score lies across all three.
Can you get a loan with a 500 credit score?
Illion places a credit score of 500 and above in the ‘good’ rating, so if the lender checks there you should still be eligible for a small loan.
If your credit score is 500 or below for either Equifax or Experian, you may have more trouble getting approved for a loan. There are still lenders, like Swoosh, that will offer finance to people with credit scores below 500, depending on your current financial situation.
Can I get a loan with bad credit?
Yes, there are a number of lenders in Australia that offer small loans for bad credit.
How to apply for a small loan
The exact application process will vary slightly depending on where you apply. But the basic 8 steps involved in applying and being approved for a personal loan are:
- Submit an online application form
- Upload/attach any supporting documentation (including payslips, identification, and bank statements)
- Wait to hear back from the lender or application assessor
- Provide any follow-up information or documents as needed
- Receive the loan outcome
- Review the loan agreement
- Sign and return the contract
- The money will be sent to your account
How to get a loan with no credit
If you are 18, have just moved to Australia, or just haven’t had any sort of finance for a long time, you may find that you don’t have any credit profile for lenders to check. This can impact your chances of getting a loan but there are still lenders that will offer you finance.
Find out what no credit history means, and how you can still get a loan.
What is the easiest small loan to get approved for?
Online payday loans and secured short-term loans are some of the easiest loans to get approved for in Australia. Small loan lenders offer simple eligibility requirements and easy approval. But they also tend to have high interest rates.
Easy personal loans up to $5,000
Swoosh personal loans start at $2,200 and allow you to apply for up to $5,000. It’s fast and easy to apply online from anywhere in Australia. Learn more about how to get a loan with Swoosh and get cashed up today.
