What is the maximum amount I can borrow on a personal loan?


Whether you’re paying for home renovations or need to consolidate debt, if you need a large lump sum, you might consider taking out a personal loan. Whatever your reason, you might be curious about how much you can ask to borrow and the maximum amount a lender would give you.

What you can ask for from a personal lender will depend on several factors, including your personal financial situation, the type of personal loan, and the purpose of the loan.

Let’s explore the maximum amount you can borrow on a personal loan and how lenders determine if you are eligible to do so.

How much can you borrow with a personal loan?

Unlike a home loan, you don’t have to apply and wait to see the loan amount the lender approves for you. Personal loans allow you to apply for the exact amount of funds that you need.

When you apply for a personal loan, you name the amount of money you want, which is generally capped between $ 5,000 and $ 60,000. This maximum amount is where Australian personal lenders tend to cap the maximum amount you can borrow, whether you are applying from a small lender or a large bank.

However, that does not mean that you will be approved for the amount you request. Personal lenders have to adhere to strict regulations that help prevent everyday Australians from taking on too much debt and being unable to repay it.

These regulations influence the eligibility criteria set by the lender, which may include:

  • Have a good to excellent credit history
  • Be an Australian citizen or permanent resident
  • Have an acceptable ID (Australian passport or driver’s license)
  • Earn a minimum income set by the lender
  • Be employed and not on probation
  • Potential securing of the loan with an asset to reduce the risk of default

Within each category, there are different results that can present your personal loan application as less risky and therefore increase your chances of approval for a large loan amount.

For example, being employed full time for 1 to 2 years may show a greater level of financial stability in your application than if you were employed occasionally for a few months. The first indicates that you may be receiving more regular income and that you may be better prepared to repay the loan.

What has an impact on the maximum loan amount?

It is not just your personal financial situation and your demand that can affect whether a personal lender allows you to borrow the maximum amount of a personal loan. It may also depend on the purpose of the loan and the type of loan.

As mentioned above, personal lenders in Australia typically cap the maximum borrowing limit at $ 50,000 to $ 60,000. However, the purpose of the personal loan and whether or not it is secured can determine whether you can apply for more funds.

For example, a car loan may allow you to get approval for a larger loan amount, depending on the lender. Westpac currently offers * an auto loan of up to $ 100,000. Approval for the full $ 100,000 may depend on the age of the car, make and model, as well as factors such as your personal financial situation.

In addition, the Greater Bank currently offers * a secured personal loan of up to $ 100,000. Now Finance also * offers borrowers the option of applying for a secured personal loan of up to $ 100,000, with an unsecured personal loan amount capped at $ 50,000.

This may indicate that securing a personal loan against an asset, such as a car, or even jewelry and artwork, can help increase your chances of being approved for a larger loan amount, compared to personal loans. unsecured.

* Product information correct as of 23.07.2021.

Can I calculate how much I can borrow with a personal loan?

If you want to find out how much you can borrow, consider using our RateCity Personal Loan Borrowing Power Calculator.

You will only have to enter some information, such as how much you want to repay, repayment frequency, and your credit score, and the calculator can help you determine your estimated borrowing power.

Be realistic with your budget and take stock of what you can afford to pay off each week, month, or fortnight. The borrowing authority calculator can then help you determine the maximum personal loan amount you can responsibly afford.

Whatever the purpose of your personal loan, keep in mind that the larger the loan amount you apply for, the higher your current repayments may be. Even if you take out a low rate personal loan, the interest charged on a larger loan amount may add up compared to borrowing a smaller amount with a higher rate. Be sure to calculate the cost of interest payments on your large personal loan before you apply to make sure you can afford the repayments.


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