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’re in need of a large lump sum you may be considering taking out a personal loan. Whatever your reason, you may be curious as to how much you can request to borrow and the maximum amount a lender would give you.

What you may be able to request from a personal loan lender will depend on several factors, including your personal financial situation, the personal loan type, and the purpose of the loan.

Let’s explore the maximum amount you may be able to borrow on a personal loan, and how lenders determine whether you qualify to do so.

How much can you borrow with a personal loan?

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

When you apply for a personal loan, you’ll nominate the amount of money you want, which is generally capped between $5,000 and $60,000. This maximum amount is where Australian personal loan lenders tend to cap the maximum amount you can borrow, whether you apply with a small lender or a big four bank.

However, this does not mean you’ll be approved for the amount you request. Personal loan lenders must adhere to strict regulations that help to prevent everyday Aussies 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:

• Having a good to excellent credit history
• Being an Australian citizen or permanent resident
• Having acceptable identification (Australian passport or driver’s licence)
• Earning a minimum income set by the lender
• Being employed and not in probation
• Potentially securing the loan with an asset to reduce the risk of default

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

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

What else impacts the maximum loan amount?

It’s not just your personal financial situation and application that may impact whether a personal loan lender will let you borrow the maximum amount on a personal loan. It may also come down to the loan purpose and loan type.

As mentioned above, personal loan lenders in Australia generally cap the maximum borrowing limit at $50,000-$60,000. However, the purpose of the personal loan and whether it's secured or unsecured may determine whether you can request more funds.

For example, a car loan may allow you to gain approval for a higher loan amount, depending on the lender. Westpac currently* offers a car loan with a maximum loan amount of $100,000. Getting approved for the full $100,000 may depend on the age of the car, make and model, as well as factors like your personal financial situation.

Further, Southern Cross Credit Union* offers borrowers the ability to apply for a secured personal loan up to $150,000, with its unsecured personal loan amount capped at $30,000.

This may indicate that securing a personal loan against an asset, like a car, or even jewellery and art, may help to boost your chances of being approved for a higher loan amount, compared to unsecured personal loans.

*Product information accurate as of 25 August 2022.

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

If you’re interested in discovering how much you may be able to borrow, consider using our RateCity Personal Loan Borrowing Power Calculator.

You’ll just need to enter in some information, such as the amount you want to repay, the repayment frequency and your credit score, and the calculator may help to determine your estimated borrowing power.

Be realistic with your budget and take stock of what you can afford to repay each week, month, or fortnight. The Borrowing Power Calculator may then help to determine what the maximum personal loan amount is that you can responsibly afford.

Whatever your personal loan purpose is, keep in mind that the greater loan amount you request, the higher your ongoing repayments may be. Even if you nab 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 repayments on your large personal loan before applying to ensure you can afford repayments.

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