Christmas is meant to be a happy time filled with family, food, and fun. But for many Aussies, it also means spending more than usual. Gifts, trips, and gatherings can easily push your budget over the edge.
If money is tight this year, you’re not the only one. Many people take out a personal loan before Christmas to cover extra costs, pay off bills, or just make it through the holidays.
Still, applying for a loan without thinking it through can hurt your credit score. Every time you apply, lenders check your credit, and leave a hard enquiry on your credit file. Too many of these can lower your rating.
Here’s what you need to know about getting a personal loan in Australia this Christmas and how to do it smartly.
What Is A Personal Loan?
A personal loan is money borrowed from a bank, credit union, or private lender, which you pay back over a fixed period, usually one to seven years, with interest. It’s different from a credit card or payday loan because it typically offers lower interest rates, predictable repayment terms, and the flexibility to use the money for almost any purpose, whether it’s for home improvements, travel, education, or holiday spending.
There are two types of personal loans: secured or unsecured. A secured loan requires you to provide collateral, such as a car or savings account, which the lender can claim if you fail to repay. An unsecured loan, on the other hand, doesn’t need collateral but usually comes with higher interest rates since it poses more risk to the lender.
During Christmas, unsecured personal loans are often the preferred choice for covering short-term expenses like holiday travel, shopping, or family gatherings.
How Do Personal Loans Work
Once your loan is approved, the full amount goes straight into your account. You’ll then make regular repayments that include both the money you borrowed and the interest.
Your rate, repayment plan, and loan amount depend on your income, credit score, and the lender’s rules. If your credit score is in good shape, you’ll likely get a better rate and more flexible terms.
Keep in mind that every personal loan appears on your credit report. Paying on time helps build your score, but missed or late payments can do the opposite. This is why applying smartly and not too often matters.
How To Get A Personal Loan In Australia
If you’re wondering how to get a loan in Australia this Christmas, here’s what you can expect.
Make sure you meet the basic requirements
Can anyone get a bank loan? Not everyone qualifies for a loan. You’ll need to be at least 18, an Australian citizen, or permanent resident, have a steady income, and be able to prove your identity and financial stability. Some lenders also accept temporary visa holders.
Check your credit file before applying
Your credit file plays a big role in whether you’ll get approved and what interest rate you’ll be offered. You can get a free copy of your credit report from Equifax, Experian, or illion. This report shows your borrowing history, repayments, and any defaults. It’s worth checking for mistakes before applying.
Australian Credit Savers can help you spot and fix incorrect or unfair listings that could be lowering your score.
Remember, every time you apply for a loan, it leaves a mark on your credit file. Too many applications in a short period can hurt your score. So, take time to compare your options carefully instead of applying to several banks at once.
Where can I go to get a loan? Compare lenders and interest rates
Prepare your documents
Different lenders offer different rates, terms, personal loan requirements, and approval processes. Some of the easiest banks to get a personal loan in Australia include:
- Commonwealth Bank
- ANZ
- Westpac
- NAB
- ING
- Bankwest
Online lenders and credit unions often have faster approval times and more flexible requirements which are ideal for borrowers with less-than-perfect credit.
You’ll need proof of ID, proof of income, recent bank statements, and details of any other debts. Having these ready makes the process quicker, especially if you want the money before Christmas.
Submit your application
Once everything’s ready, apply online or in-branch. Some lenders offer personal loan pre-approval, allowing you to see how much money you may be eligible to borrow before committing to a full application.
How Long Does A Personal Loan Take To Get Approved
Approval times can vary. Online lenders sometimes give same-day decisions, while banks might take a few business days depending on your documents and credit history.
If you’re applying in November or December, expect minor delays as lenders process more applications because of peak loan season. Plan early to ensure you get your funds in time for the holidays.
Applying Too Often? Hard Enquiries Explained
One of the biggest mistakes borrowers make during the holidays is applying for multiple loans at once. Each time you apply, the lender performs a hard enquiry, a mark that stays on your credit file for up to five years.
While one or two enquiries aren’t that big of a deal, several within a short time can lower your credit score and make you appear desperate or very risky. That’s why it’s better to research thoroughly, choose one lender, and apply once you’re confident.
If you already have several hard enquiries or a poor credit score, credit report repair companies can help by reviewing and disputing any incorrect listings on your file.
Why Credit Repair Is Essential Before Taking Out A Loan
Before taking out a personal loan this Christmas, make sure your credit file is in good shape. Many Aussies don’t realise how much incorrect or outdated information can hurt their score.
Credit repair professionals, like Australian Credit Savers, can help review your credit report for errors and dispute inaccurate or unfair defaults. They can also help request for the removal of listings that don’t meet legal standards and guide you on how to rebuild credit responsibly.
Improving your score, even a little, can make a big difference. It could mean faster approval and a lower interest rate, saving you money in the long run.
The Best Places To Get A Loan In Australia
The best places to get a loan in Australia include banks, because they offer reliability and established systems. They are best for borrowers with strong credit histories. Credit unions are community-focused and more flexible with approval criteria. Online lenders can be ideal if you need quick access to funds, since they often have shorter turnaround times and fewer requirements.
What If Your Loan Application Is Rejected?
If your application gets turned down, it can be easy to get discouraged. It happens more often than you’d think. Start by asking your lender why. The reason can help you figure out what to fix next time.
The most common reasons for rejection are a low credit score, too many recent credit enquiries, unstable income, or existing debts. Use this as a chance to improve your finances and your credit record before trying again. With time, credit repair, and better habits, your chances of approval will go up.
Borrow Wisely And Protect Your Credit This Christmas
Christmas can be a wonderful time, but it can also be stressful when money is tight. A personal loan can help ease that pressure, as long as you use it wisely and plan ahead.
Before you apply, take a step back, look at your options, and make sure it fits your budget. Remember that every loan application leaves a mark on your record.
Borrow what you need, pay on time, and avoid multiple applications. With a little planning, you can enjoy the holidays without putting yourself under financial stress.