A personal loan is a sum a credit provider agrees to lend you, which you then repay with interest and any fees, usually on a set schedule. That simple shape hides a few choices that change the cost a great deal: the amount, the term, whether the rate is fixed, and what happens if a repayment is late.
Secured and unsecured
Some loans are tied to an asset, such as a car. Others are unsecured, which means the credit provider is relying on your income and credit history rather than on something they can sell. Unsecured loans can be simpler to arrange and are often priced higher, because the risk sits differently.
The figures worth reading twice
Look at the total amount you will repay, not only the weekly figure. A longer term can ease each instalment and raise the overall cost. Fees — establishment, monthly or late — belong in that total. If a comparison rate is shown, use it as a guide alongside the contract, not as a substitute for reading the contract.
Before you apply
Write down the cost you are actually trying to cover, and whether a smaller amount would do. Check that a new repayment would still leave room for rent, food and existing debts. If you apply through a service such as Koala Loans, a credit provider — not the website you started on — decides whether to make an offer, and on what terms.
This guide is general information, not personal financial advice. If the decision feels heavy, consider speaking with a licensed adviser or an independent financial counsellor.