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Applying for a Personal Loan: Everything You Need to Know

If it's your first time applying for a personal loan, you might be a bit overwhelmed by all the documents and information you need to supply. Don’t worry, you’ve got this — and we’re here to help support you along the way.

We’ll go through all the information you need to provide your lender, plus, we’ll go over a few personal loan basics to answer some more common questions. If you’re confused or need some more personalised help, you can always get in touch with someone on our team who can help you along.

Now, let’s get started with the basics of applying for a personal loan.

Personal loan applications 101

Before we get into the nitty-gritty of exactly what you need to supply your lender, you’ll want to make sure you can answer ‘yes’ to some basic questions . These are questions that People’s Choice will ask

  • Are you aged 18 years or older?
  • Are you an Australian citizen, or otherwise a permanent resident in Australia?
  • Applying for a personal loan will trigger a credit check, which may have impacts to your credit score — are you ok with that?

If you answered yes to all of those, you’ve already passed the first hurdle. Success!

If you didn’t answer yes to all of them, you might have trouble applying for a personal loan. There are some things that lenders can’t budge on, for example, the minimum age for a personal loan in Australia is 18 years old.  

Now that we’ve got that out of the way, let’s get into some specific information and documents your lender is probably going to need from you.

What do you need to apply for a loan?

While every lender is different and will ask different questions, there are a few pieces of information that almost all of them will want.

It’s pretty annoying to repeatedly stop and start your applications, so a convenient feature that many lenders offer (including us at People’s Choice) is the ability to save where you’re up to and revisit your application within a few days. This can help if you thought you had all the information you needed, but realise you need some time to get something else.

Depending on the lender, you might not need to have all of this information handy. But if you’re applying to multiple lenders, there’s a pretty good chance that almost all of these will be asked for eventually:

Some form of identification

Every lender will need to confirm that you are who you say you are. This usually means providing 100 points of identification, which are documents from a few different categories and issuers. You will likely meet this requirement if you can provide some combination of:

  • An Australian driver’s licence, including the licence number and expiry date;
  • A passport which is currently valid or is not more than two years out of date;
  • A birth certificate; or
  • Another Australian Government-issued ID card.

Details about your income and employment

Your lender will want to make sure you have enough money coming into the bank to pay back your loan. Usually, they’ll ask for a few of the following:

A few of your latest payslips from your job, including overtime, bonuses and allowances;

  • Your most recent payment summary/group certificate;
  • Proof of income from your pension or Centrelink payments;
  • Proof of income from rental properties;
  • Proof of income from child support payments; and
  • A letter of reference from your boss, or other proof of current employment.

Details about your expenses and liabilities

Your lender will want to know how you spend your money so they can better judge if you can reliably pay back your debts in the future. They’ll probably ask for some combination of:

  • Recently paid utility, rent and board bills;
  • Proof of repayment for other loans, like a mortgage;
  • Any outstanding balances you have on a home loan, credit card or other debt through buy now, pay later services; and
  • Bank statements of credit card repayments.

Details about your assets

Your lender will want to make sure you have a decent history of saving for and purchasing other assets . The lender will ask you information about:

  • How much cash you have saved in the bank;
  • The value of any cars, motorbikes or other vehicles you own;
  • How much any real estate you own is worth;
  • The value of any shares or bonds you own; and
  • The value of the contents of your home.

How applying for a loan affects your credit score

Your credit score is a number on your credit report and is based on personal and financial information about you which helps lenders to decide if they can approve your application.

Each time a lender makes a credit score enquiry it's documented against your credit report.  It's important to do your research based on your circumstances and reasons for a loan, and to choose a lender that matches your own requirements.

Do you need a personal loan?

If you’re a member with us and you’re thinking of getting a personal loan because you're having a tough time making ends meet, get in touch with our financial hardship team.

If you aren’t sure if a personal loan is the right option for you, you can learn more on our personal loans page. Alternatively , get in touch with our team or visit us at one of our branches.

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