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What is a $4,000 personal loan?

A $4,000 personal loan is a short-term loan that will usually have a loan term of anywhere up to five years.It can be either be secured or unsecured.

A secured loan is connected to a form of security (or collateral) such as a car or property - so if the borrower fails to repay the loan, the lender can seize the security, sell it and recoup its money.

An unsecured loan is not connected to any security, which makes it harder for a lender to chase its debts.

As a result, lenders regard unsecured loans as riskier than secured loans. That’s why a $4,000 unsecured personal loan is likely to have a higher interest rate than a $4,000 secured personal loan.

$4,000 loan - fixed or variable?

When you apply for a $4,000 personal loan, you might be asked to choose between a variable interest rate or a fixed interest rate.

If you take out a variable-rate loan, the lender can change your interest rate whenever it likes. Sometimes, variable rates go up (which means higher repayments) and sometimes they go down (which means lower repayments). Lenders set their variable rates based on a range of factors - including how the market is performing and what their competitors are doing – so there’s no easy way to predict whether they’ll go down or up.

If you take out a fixed-rate loan, the lender can’t change your interest rate. That can be good if interest rates are moving up in the wider market, but bad if they’re moving down.

How much does a $4,000 personal loan cost?

If you took out a $4,000 personal loan with a loan term of two years and a monthly fee of $10, here’s how much you’d have to pay based on different interest rates:

  • 8 per cent = $191 per month, $4,582 in total
  • 9 per cent = $193 per month, $4,626 in total
  • 10 per cent = $195 per month, $4,670 in total
  • 11 per cent = $196 per month, $4,714 in total
  • 12 per cent = $198 per month, $4,759 in total

Can you get a $4,000 personal loan if you have bad credit?

It is possible to get a $4,000 personal loan if you have bad credit, although it’s harder and more expensive.

As a general rule, the lower your credit score, the fewer lenders will want to do business with you, and the more they’ll charge in interest rates and fees.

If you want a $4,000 bad credit personal loan, you will probably have to do business with a smaller, online lender rather than a well-known bank or credit union.

Make sure you do your research before you apply for a $4,000 bad credit personal loan, because a failed application might further damage your credit score.

RateCity's personal loan marketplace can help assess the likelihood of getting approved for a personal loan, just by adding in your personal details and your loan requirements. Best of all, it won't affect your credit score so you can sort through the list of lenders likely to approve you, before submitting an application.

How do you compare $4,000 personal loans?

There are six main ways to compare $4,000 personal loans:

  1. Interest rates
  2. Interest rate type
  3. Fees
  4. Features
  5. Loan type
  6. Loan term


Make sure you do lots of research before taking out a $4,000 personal loan, because there can be a big difference in the interest rates charged by different providers. These differences could save you - or cost you - hundreds of dollars.


Do you want to play the market with a variable-rate loan or do you want the certainty of a fixed-rate loan? This is something to consider when comparing $4,000 personal loans, because while some lenders will allow you to choose your interest rate type, others will offer only one option.


Pay close attention to fees when researching $4,000 personal loans, because these can significantly affect how much you end up paying over the life of the loan. The two most common fees are application fees (also known as upfront fees) and account-keeping fees (also known as ongoing fees or monthly fees). Some lenders may also charge fees for accessing a redraw facility, paying off your loan early or missing a repayment.

Facts about personal loans

A $4,000 personal loan is defined as a ‘medium amount loan’, which is the name given to personal loans between $2,001 and $5,000. When medium amount loans have a loan term of between 16 days and two years, fees are limited to a one-off application fee of $400 and a maximum interest rate of 48 per cent (including all other fees and charges).


When comparing $4,000 personal loans, don’t forget to weigh up any add-on features, which can affect how easy (and expensive) it is to use the loan in question. Features may include:

  • Extra repayments (which allows you to pay off your loan ahead of schedule)
  • Redraw facility (which allows you to ‘borrow back’ extra repayments)
  • Line of credit (which allows you to use the funds only as you need them, like a credit card)


Your $4,000 personal loan can either be secured or unsecured. A secured personal loan will almost certainly be cheaper, but you’ll have to offer some sort of collateral, such as a car or property. An unsecured personal loan will probably be simpler to take out, but will almost certainly be dearer.


Different lenders will offer you different loan terms, which is another factor that can significantly affect how much you end up paying over the life of the loan. A shorter loan term means higher monthly repayments but lower total repayments, while a longer loan term means lower monthly repayments but higher total repayments. For example, if you took out a $4,000 personal loan with an interest rate of 10 per cent and a monthly fee of $10, here’s how the loan term would affect your repayments:

  • Loan term of 1 year = $362 per month, $4,340 in total
  • Loan term of 2 years = $195 per month, $4,670 in total
  • Loan term of 3 years = $139 per month, $5,006 in total

Who offers $4,000 personal loans?

The big four banks (ANZ, Commonwealth Bank, NAB and Westpac) offer $4,000 personal loans. So do dozens of other lenders, including smaller banks, credit unions, building societies, online lenders, peer-to-peer lenders and non-bank lenders.

How do you take out a $4,000 personal loan?

Most lenders will allow you to take out a $4,000 personal loan over the internet, although some will also allow you to do it in-branch.

As a general rule, you’ll need to provide information about your:

  • Personal details
  • Income and expenses
  • Job situation

Some lenders may assess your application and (if successful) transfer funds on the same day.

How long does it take to get a $4,000 personal loan?

In the best-case scenario, the lender will need just 60 minutes to assess your $4,000 personal loan application, approve it and then transfer the funds to your account. If you already have an account with that lender, you could receive the funds almost immediately.

A more likely scenario is that it would take a week for the lender to assess your application and for the $4,000 to then appear in your bank account.

What can I use a $4,000 personal loan for?

Here are seven ways to use a $4,000 personal loan:

  1. Holiday
  2. Wedding
  3. Debt consolidation
  4. Car repairs
  5. Rental bond
  6. Medical bill
  7. School fees

What are the pros and cons of $4,000 personal loans?

The benefit of taking out a $4,000 personal loan is that you can quickly access a substantial amount of money, which you can use to pay a pressing bill.

The downside to taking out a $4,000 personal loan is that this speed and convenience might cost you hundreds of dollars in interest and fees.

Worse still, if you fall behind on your repayments, you might be hit with penalty fees and a downgrading of your credit score.

What are some of the alternatives to $4,000 personal loans?

Two alternatives to $4,000 personal loans are to access the funds through a credit card or a home loan - although both options come with potentially serious consequences and should not be done lightly.

If you wanted the $4,000 to make a purchase or pay a bill, you could charge it to your credit card. This strategy might work well if you paid off the entire debt during your credit card’s interest-free period. But if you didn’t, you would be charged interest - and this rate would most likely be higher than the interest on a personal loan.

If you wanted the $4,000 to consolidate credit card debt, you might be able to take out a balance transfer credit card instead. This strategy might work well if you had the discipline to pay off the debt during the balance transfer period and to refrain from spending any money on the new credit card. However, it could prove very costly if you failed to do one or both of those things.

Another option would be to take out the $4,000 from your home loan - either from an offset account or a redraw facility. This strategy might work well if you continued to make your mortgage repayments and eventually returned the $4,000 to your offset account or redraw facility. However, if taking $4,000 from your home loan caused you to fall behind on your mortgage repayments, you might face the terrible prospect of your home being seized.

Looking for other forms of finance with bad credit?

We can help. Visit out guide to bad credit to find out how to improve your credit score and apply for other financial products with bad credit, including home loans, car loans and credit cards.

Frequently asked questions

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

Is a personal loan a variable or fixed-rate loan?

Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.

A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.

With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

Can I merge my personal loan with my home loan?

Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.

However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.

What are the pros and cons of debt consolidation?

In some instances, debt consolidation can help borrowers reduce their repayments or simplify them. For example, someone might take out a $7,000 personal loan at an interest rate of 8 per cent so they can repay an existing $4,000 personal loan at 10 per cent and a $3,000 credit card loan at 20 per cent.

However, debt consolidation can backfire if the borrower spends the extra money instead of using it to repay the new loan.

Does refinancing a personal loan hurt your credit score?

Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.

In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.

However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

What do credit scores have to do with personal loan interest rates?

There is a strong link between credit scores and personal loan interest rates because many lenders use credit scores to help decide what interest rates to offer to potential borrowers.

If you have a higher credit score, lenders will probably classify you as a lower-risk borrower. That means they’ll be keen to win your business, so they may offer you a lower interest rate if you apply for a personal loan.

If you have a lower credit score, lenders will probably classify you as a higher-risk borrower. That means they might be concerned about you defaulting on the loan and costing them money. As a result, they might protect themselves by charging you a higher interest rate.

Can I get a bad credit personal loan with a guarantor?

Some lenders will consider personal loan applications from a borrower with bad credit if the borrower has a family member with good credit willing to guarantee the loan (a guarantor).

If the borrower fails to pay back their personal loan, it will be their guarantor’s responsibility to cover the repayments.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Can I get guaranteed approval for a bad credit personal loan?

Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application. 

It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit because there’s a higher likelihood that the personal loan will be repaid. 

So a borrower with good credit is more likely to have a loan approved and to be approved faster, while a borrower with bad credit is less likely to have a loan approved and, if they are approved, may be approved slower.

What is an unsecured bad credit personal loan?

A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset, such as a car or jewellery, as collateral or security. Lenders generally charge higher interest rates on unsecured loans than secured loans.

What is credit history?

Your credit history covers everything to do with applying for loans. It includes the number of loans you’ve applied for, the amounts you’ve borrowed and your record of meeting repayment schedules.

Where can I get a personal loan?

The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:

There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.

What is a secured bad credit personal loan?

A bad credit personal loan is 'secured' when the borrower offers up an asset, such as a car or jewellery, as collateral or security. If the borrower fails to repay the loan, the lender can then seize the asset to recoup its losses.

How do you get a bad credit personal loan?

You can get a bad credit personal loan by applying directly to a lender, by going through a mortgage broker or by using a comparison website like RateCity.