The features and benefits of a $12,000 personal loan
You can compare some of the lowest-interest loans available for your specific borrowing profile from a wide range of Australian lenders.
You can pay your loan debt at your own speed, either cutting down on overall interest by selecting a shorter term or minimising your monthly spend with a longer one.
Pay either on a monthly, fortnightly or weekly schedule to give you the option to structure your contributions around your own income situation.
You won’t be required to pay a deposit or any upfront fees as part of your loan, with 100% financing available for whatever purpose your need.
You don’t have to stick to the term that you set, either, with lenders on our panel who don’t charge for additional payments or early loan settlements.
You won't have to worry about supplying any assets like your car as security for your loan, as our lending partners offer unsecured financing.
Types of personal loan
With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.
Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.
Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.
Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.
If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.
Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.
There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.
Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.
Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.
There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.
Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.
Why compare personal loans through Savvy?
How to compare $12,000 loans from different lenders
The interest rate on your personal loan will be the most substantial factor in determining its overall cost. As such, it’s important to search for the lowest rates that you can during the comparison process. Even the smallest difference in interest can save you a meaningful amount across your loan term. For instance, a $12,000 loan paid over three years at 7.5% p.a. is estimated to cost almost $200 less in interest alone than the same loan at 8.5%.
How to apply for a personal loan
$12,000 loan queries answered
More about $12,000 personal loans explained
What factors can impact my personal loan interest rate?
Personal loan interest rates can be affected by several different variables across your application, so it’s worth knowing what these are before you apply so you can enter with a rough idea of what your rate may be. Because this serves as the most significant factor on your loan in most cases, you should do everything you can to reduce it wherever possible. Some of the main factors which can have an effect on your rate are:
Your credit history
Lenders will look to your credit file as the clearest indication of your record covering your debts over the past five years. This history includes the repayments of other loans and bills such as utilities, phone and internet to paint a picture of you and your reliability when it comes to paying everything on time and in full.
Your score will reflect how well you’ve been able to do this, with late payments and defaults on prior loans factors which can decrease your score. The better your score, the more trustworthy you’ll be seen to be by your lender and the lower your rate is likely to be as a result. Lenders also look for borrowers who have repaid similar loans recently, such as other personal loans, as this is a practical demonstration of their ability to repay a loan.
Additionally, lenders want to be confident that you’ll be able to support your repayments across the course of your term without any issues. Part of this is ensuring you’re comfortable and secure enough in your job to not have to worry about your income stream running dry.
For instance, full-time and permanent part-time employees who have been in the same job for a long time stand the best chance of receiving a low rate, as lenders will consider them a safer prospect. Casual employees, particularly those who haven’t been working for a long time, and newly self-employed workers are likely to receive higher rates as a result. You may need to receive a letter from your employer to reaffirm the stability of your job and pass it on to your lender.
The same applies to your income itself. If you’re working full-time or part-time, your income is likely to be set in stone and unchanging from month to month, giving you the best shot at a lower interest rate. However, fluctuating income is something which can lead to unease in lenders when assessing applications. Part of the assessment when it comes to casual and self-employed workers is that their income is consistent for an extended period. For the former, this is usually a minimum of six months, while business owners may need to have been running their operation for as long as two years before qualifying for a loan, let alone with a low rate.
Your loan’s affordability
Finally, lenders will charge interest and fees based on how much of a risk you pose of defaulting. If they’re not 100% certain the terms you’ve applied for on your $12,0000 loan are entirely comfortable for you, they’ll either impose a higher rate to compensate for the increased risk or reject your application altogether.
Before applying, you should always have an idea of what you can comfortably manage when it comes to your loan repayments. With rough figures in mind, you stand a better chance of approval for a lower rate. You can use Savvy’s borrowing power calculator to help give you a rough estimate of what size loan is best for you so you can see whether you might be able to borrow more or less than $12,000.
How long can I take to repay my $12,000 loan?
While personal loans typically range from one to seven years, lenders will determine whether the term you propose for your finance deal is appropriate for the amount you’re borrowing. They’re unlikely to approve long-term loans of $6,000, for instance, as this would pose an unnecessarily high risk of default and wouldn’t yield a great deal of interest overall to compensate them for it.
Because of this, you’re unlikely to be approved for a seven-year term when borrowing an amount as little as $12,000 (although some lenders may be able to approve this in certain circumstances). Generally, the maximum advisable term for a $12,000 loan would be around five years if you’re looking to lock in more manageable repayments but not let the cost of the loan balloon out too much.
However, it’s important to note that you should always aim for as short a loan term as you feel comfortable repaying. The shorter your term, the less you’ll have to pay in interest and fees. This is because interest is calculated on your outstanding principal, so if it decreases at a slower rate, the interest you’ll have to pay will remain higher for longer. Always prioritise your comfort in repaying your loan above all else, though.
What can I use a personal loan for?
Personal loans are designed to be highly flexible and able to be used for just about any purpose you might need. This sets them apart from other types of finance in a meaningful way: where home loan funds can only be used to purchase property and its associated costs, with the equivalent being true for car loans, personal finance can essentially be distributed however you like. Because of this, there are many common uses for personal loans which Australian borrowers look to every month. These include:
- Funding home renovations, improvements or any other expansion around your property or your investment
- Helping ease the burden of unexpected medical fees, which can set you back thousands
- Covering the cost of your children’s education
- Consolidating existing debts, such as other outstanding personal loan or credit card debts
- Paying for your dream wedding or a fitting funeral for a loved one
- Helping you pay for your next holiday, whether it’s an expansive trip around the globe or simply a trip interstate or up the coast
Helpful personal loan guides
Still looking for the right personal loan?
Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.