What's a personal loan? Everything you need to know before applying
Financial basics · 27 January 2026Clément Bolmont
A dream can often be just one financial step away from becoming a reality. Whether you’re looking to renovate your kitchen, finally take that road trip across the Kimberley, or consolidate existing debts into one manageable repayment, understanding your financing options is the best way to start.
In this guide, we explain what a personal loan is, how interest rates work in Australia, and how you can manage your borrowing journey with clarity using Revolut.
Discover our loans options, get a quote without impacting your credit score and apply for a personal loan in a matter of minutes.
18+, T&Cs apply.
Consider PDS & TMD at https://ravolut.com/en-AU/
The information provided is accurate as of 19 January 2026.
The content of this page is for general information purposes only and does not constitute financial advice. If you have any questions about your personal circumstances, please seek professional and independent advice. Revolut is not a financial adviser.
Personal loans in Australia: a quick summary
A personal loan is a set amount of money borrowed from a lender that you pay back in regular instalments, alongside interest and fees, over a fixed term. Let's break it down:
- Lump sum: you’ll get the money all at once.
- Set term: usually between 1–7 years. With Revolut, your personal loan can be repaid flexibly up to 7 years with no additional cost.
Interest is structured with either fixed or variable rates. With us, you’ll get competitive fixed rates.
Here's why some people choose to take out a personal loan:
- No security needed: most loans in Australia provided by digital providers, including ours, are unsecured personal loans
- Versatility: you can use the money to pay for things like a new car, travel, debt consolidation, or a wedding
What's a personal loan and how does it work?
At its core, a personal loan is a type of credit that allows you to borrow a specific sum for almost any legitimate personal purpose.
Unlike a mortgage, which is for a property, or a business loan, which is for a business, a personal loan is flexible in how it is used.
Once you’re approved, we’ll transfer the money to your account. You then enter a repayment phase where you pay back a portion of the principal (the original amount borrowed) and the interest each month or fortnight.
In Australia, these loans are governed by strict responsible lending obligations. This means that we, and other lenders, must ensure you’ve got the capacity to repay the money without experiencing substantial financial hardship.
A practical example of a personal loan
To understand how the maths works, let’s look at an example for borrowers with an excellent credit history. Suppose you borrow $10,000 for 36 months:
- Annual fixed interest rate: 6.17% p.a. (comparison rate 6.17% p.a.)
- Monthly fees: $0
- Early repayment or exit fees: $0
- Estimated monthly repayments: $304.99
- Total estimated repayment: $10979.65 (including total interest cost)
This is why it’s essential to look at the comparison rate, rather than just the base interest rate.
Based on customers with excellent credit history, calculated on an unsecured personal loan of $10,000 and 3-year term.
Warning: this comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Application approval and interest rates are subject to assessment. Terms, conditions, fees and charges, and eligibility criteria apply.
From submitting your application to your final repayment, manage everything in-app. And for any hiccups along the way, our customer support team has got you covered. Contact us via the in-app chat. If you're not a customer yet, contact us by email at the address au_credit_support@ravolut.com.
Unsecured personal loans vs secured personal loans
When you start comparing personal loans, the first major decision is choosing between a secured and an unsecured option.
What's an unsecured personal loan?
An unsecured personal loan is one that doesn’t require you to provide an asset, such as a car or a house, as security for the debt. Because there’s no collateral for us to claim if you stop making repayments, these loans represent a higher risk to us.
As a result, an unsecured personal loan might have a slightly higher interest rate than a secured one. The benefit for you is speed and simplicity. There’s no need for asset valuations or complex paperwork, which is why digital platforms like ours often focus on this type of borrowing.
It’s a common choice for holiday loans or student expenses where there isn’t a physical asset to use as security.
What's a secured personal loan?
A secured loan is backed by an asset.
If you’re buying a new car, for example, the vehicle itself usually serves as security. If you fail to make repayments, the lender has the right to seize the asset and sell it to get the money you owe.
Because the risk is lower for the lender, you might find lower interest rates on secured loans. However, the application process can be slower and require more paperwork since they need to verify the value and insurance of the asset.
Why choosing an unsecured personal loan over a secured one?
Both unsecured personal loans and secured loans can be used to buy goods such as a second-hand or near-new cars, but unsecured personal loans also allow you to use the money for repairs, detailing, modifications, add-ons, restorations, or upgrades.
For instance, with an unsecured personal loan, you don’t need to pledge the car as security for the loan. This means you won't lose ownership of the vehicle if you're unable to make repayments, although your credit history may still be negatively impacted.
While many secured loans have penalty fees for making early repayments, you can pay back your Revolut unsecured loan anytime, with no extra charges.
Personal loan interest rate: fixed or variable rates?
The way interest is applied to your debt dictates your monthly budget. In the Australian market, you’ll usually choose between 2 structures:
Personal loan fixed interest rates: for the planners
With a fixed rate, the interest percentage is locked in for the life of the loan, which provides certainty. Your repayments will be the same amount from the first month to the last.
This is a good option if you like to budget down to the cent and don’t want to worry about market fluctuations. The main drawback is that fixed-rate loans sometimes have restrictions or fees if you want to make extra repayments or pay off your debt faster.
With us, you’ll receive a competitive fixed rate, but you don’t have to worry about additional fees for extra repayments — you can repay your loan flexibly at no additional cost. Pay your loan back early or change repayment dates in-app, it won’t cost you more.
Personal loan variable interest rates: for the flexible
A variable rate can move up or down depending on our costs and the broader economic environment. While variable rates might start lower than fixed rates, they carry the risk of increasing, which would raise your regular repayment amount.
However, variable-rate loans may offer more flexible features, including the ability to pay back the money early at no extra cost.
As we mentioned above, with us you get both the certainty of a fixed rate and the repayment flexibility of a variable rate.
When should you consider a personal loan?
While you can use the money however you like, most people in Australia use it for specific, high-cost projects. These include:
Car loans
Buying a vehicle is one of the most common reasons to seek financing. Whether it’s a new electric vehicle or a reliable second-hand car for the family, a personal loan can lend you the money you need quickly.
Explore car loans with Revolut.
Debt consolidation and refinancing
If you’ve got multiple credit cards or smaller debts with high interest rates, you can use a personal loan to pay them all off. This refinancing simplifies your debt into one single repayment and, in many cases, reduces the total interest you’ll pay over time.
Explore refinancing loans with Revolut.
Travel and holiday loans
Planning an international trip often involves significant upfront costs for flights and accommodation. A personal loan can help you cover these expenses today, allowing you to pay them off over a few years rather than draining your savings at once.
Explore holiday loans with Revolut and browse our app for further travel functionalities (eSIMs, travel money cards, Stays & Experience bookings, and more). 18+, eSIMs T&Cs and fees apply.
Funding life’s milestones
Weddings, important birthdays, or even medical procedures can lead to large one-off expenses. We’ve designed our loans to give you the flexibility to handle these costs without putting your plans on hold.
Understanding personal loan interest rates and fees
You might wonder what the actual cost of your personal loan is. In Australia, we use risk-based pricing to determine your specific rate.
What's the interest rate on a personal loan?
The interest rate is the percentage of the principal that we charge you to borrow the money. We calculate this based on:
- Your credit score: a higher score usually leads to a lower rate
- The loan term you choose: up to 7 years with Revolut
It only takes a minute to get your quote, and finding out your rate won't impact your credit score. All we require is your basic personal details so we can match your details with the credit bureau.
The importance of the comparison rate
By law, Australian lenders must display a 'comparison rate'.
This is a single figure that includes both the interest rate and most of the fees associated with the loan. For example, if a loan has a low interest rate but very high monthly fees, the comparison rate’ll be much higher, warning you of the additional costs. When you compare personal loans, always use the comparison rate to ensure a fair comparison.
How much can you borrow with a personal loan?
The amount you can borrow varies between lenders. Usually, personal loans in Australia range from $5,000–50,000. For an unsecured personal loan, the limits are often lower to manage risk.
With us, you can apply for an unsecured personal loan up to $50,000.
We determine your borrowing power by looking at your surplus income. This is the money you’ve got left over each month after all your existing bills and lifestyle expenses are paid.
Get a quick quote to find out your personalised rate in-app. You can find out your repayment amount, and adjust loan amount and loan term to suit your needs. Getting a quote to calculate your loan just takes a few minutes will not impact your credit score
How to apply for a personal loan
We’ve removed the paperwork and the long queues. If you’re one of our customers in Australia, you can apply and manage everything right from your phone. Here's how:
- Open the app: if you haven't got it yet, download it and sign up.
- Get a quote: go to the Loans section and follow the steps to see your options.
- Follow the prompts: provide some basic information about your income and expenses and documentation where required. Pay attention to your in-app chat for any follow up questions from credit assessor.
- Review and sign: if your loan is approved, read through your agreement. Once you’re happy, sign it digitally in-app.
- Get your money: once approved, your money will be available on your account within seconds.
What information and documents do you need to apply for a personal loan?
To get started, you'll need to have a few details ready. This helps us find your personalised rate and speed up the process.
With us, the process is entirely in-app so you can submit your documents in a few minutes.
We’ll ask for some basic details to see what we can offer you. These include:
- Loan details: how much you want to borrow and why
- Personal info: your name, date of birth, and address so we can find you at the credit bureau
- Phone number: we’ll verify this so you can continue your application
- A few questions: we may ask a few questions about your residency and marital status, as well as expenses and income details
Before you can proceed, you'll need to download our app and complete our identity verification. If you’re already a customer, you can skip that bit and go straight to the application.
Can you get a loan with bad credit history?
It’s possible, but it can be more difficult. Some lenders in Australia specialise in 'bad credit' loans, but these often carry significantly higher interest rates and more restrictive terms.
At Revolut, we look at your credit history when you apply. If we see a bad credit history, we may not approve you for a personal loan.
Does checking my rate affect my credit score?
One of the major concerns when exploring loan options is the potential impact on your credit score.
When you get a quote in the Revolut app, we perform a 'soft' credit check. This type of inquiry allows us to assess your eligibility and present your unique interest rate and repayment options without leaving a mark on your credit history.
Your credit score is only impacted when you formally submit the full application, giving you peace of mind to explore your options without financial commitment.
Should you prepay your personal loan?
When you’ve got extra money, it’s tempting to put it towards paying off your debt. This is called prepayment. By paying more than the minimum, you reduce the principal faster, which reduces the total interest we charge you.
If your goal is to have zero debt as quickly as possible, look for a lender like us who offers flexible repayment options without added costs. We don’t believe in charging you extra for being diligent with your repayments.
If you're not with us, you must check your contract. Some providers may charge an early exit fee or break fee on fixed-rate loans.
Important risks and considerations
Borrowing money is a significant financial decision. While a personal loan provides immediate access to money, it also means committing a portion of your future income to repayments.
If you miss repayments, it’ll negatively impact your credit score and can lead to late fees. This can make it harder to get a credit card or a mortgage in the future. Always make sure the payments fit within your budget and have extra money ready in case things change.
If you're facing difficulties with repayments, you can look for Revolut help during financial hardship.
5 tips to choose the best personal loan for your needs
To make sure you get the right deal, keep these tips in mind:
- Focus on the comparison rate: it’s the most accurate measure of cost
- Check for fee clarity: look for loans with no monthly service or early exit fees like the Revolut personal loan
- Match the term to the project: a longer term means lower monthly payments but more interest paid over time
- Be honest on your application: accurate data leads to faster approvals
- Consider the 'why': only borrow what you need for a specific purpose to avoid overextending yourself
Why choosing Revolut for your personal loan?
Choosing Revolut for your personal loan means choosing control and flexibility once your finance is in place.
Revolut allows you to manage everything in-app, putting you in the driver’s seat. You can effortlessly customise repayment dates to suit your salary cycle, ensuring you never miss a beat.
We also empower you to make unlimited extra repayments or pay out your loan early, with no extra fees or penalties — giving you the freedom to become debt-free faster.
Plus, checking your statements, repayment schedules, and loan progress is straightforward and clear, all in one place.