How Much Can I Borrow with a Personal Loan?

Find out how much you can borrow on your personal loan, as well as how to maximise your borrowing power, here with Savvy.

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, updated on October 5th, 2023       

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How much am I able to borrow on a personal loan?

The amount you can borrow on a personal loan varies based on the type of loan you choose to take out. If you choose to apply for an unsecured loan, you can borrow as much as $75,000 from a minimum of just $2,000. However, secured personal loans can provide you with access to loan amounts as high as $100,000 from a minimum of $15,000. This means that the type of loan you choose will ultimately inform the definitive ceiling placed on you with regard to your borrowing.

With secured loans, it’s important to note that your maximum borrowing power is affected by the asset you utilise as collateral. For example, if you put up your car valued at $30,000 and asked for a $100,000 loan, you’re unlikely to be approved for the amount you’re asking for, even if you can afford to support the maximum unsecured loan amount. This is because, in the event that you default on your loan, your lender is likely to be out of pocket even when selling off your collateral. As such, your security must be of a similar value to your loan amount, or at least the amount beyond the maximum you’re eligible to borrow unsecured.

However, it’s important to note that the nature of your loan isn’t the only element which impacts your borrowing power.

What other factors affect my borrowing power?

Your profile in itself is perhaps the most significant factor in determining how much you’ll be eligible to borrow. While your loan provides a guide for the upper limit of your borrowing capacity, personal variables are what truly determines the maximum you can be approved for. The primary areas that are taken into consideration when processing your application are:

Your credit file

The state of your credit history is one of the most important influences on your lender when it comes to helping them determine how much they’d be willing to approve you for.

Your credit score is a number which reflects how reliably you’ve been able to service debt in the past, whether that be through repaying other loans, paying off your credit card at the end of each month or your household debts on time.

The better you are with these, the higher your score will be and the more your lender will feel comfortable lending larger sums to you.

Your income

Secondly, the income that you earn will obviously have a significant impact on the size of loan that your lender is willing to grant you.

Perhaps above all else, your lender must feel that you’ll be able to comfortably afford to repay your loan consistently across your desired term, so if you’re earning $4,000 per month and applying for a loan above that mark, you won’t be approved.

This also extends to the nature of your employment, as a lack of stability could indicate to your lender that your income is at greater risk of changing or evaporating altogether.

Your expenses

In conjunction with your income, your monthly expenses will help your lender assess your borrowing capacity more accurately.

This is because your monthly borrowing capabilities are based on your disposable income, rather than simply what you earn each month. This is done by subtracting your expenses from your income, which gives you the money left over which you can use to cover your loan payments.

Lenders will want to see a clear disparity between your total disposable income and the cost of your expenses, with loan payments usually only able to take up 30% of that income.

How can I work out my borrowing power?

Fortunately, you don’t have to go into the personal loan application process blind with regard to what you can potentially be approved for. By using Savvy’s personal loan borrowing power calculator, you can determine how much your lender is likely to approve you for based on your current profile. This includes not only the factors above, but how you receive your income, the number of dependants you support and the limits on your credit cards.

It’s highly useful to run calculations like these before you submit your application, as you run the risk of over-applying and facing an avoidable loan rejection. You may think that you’re capable of supporting a higher loan payment than your lender does, for instance, which can result in a mark being placed on your credit file.

Although this calculator isn’t likely to give you the exact amount to the dollar that you can borrow (as you’re not inputting your credit score), it gives a firm indication of the maximum you can be approved for. You can also use our personal loan repayment calculator to determine what different loan sizes will end up costing you overall.

Top tips for maximising your personal loan borrowing power

Take steps to improve your credit score

Because your credit score is so important, there are ways that you can look to improve it in the leadup to your application if it’s not perfect as is. Paying off your outstanding debts, such as loan and credit card debts, is one way to help boost your score, while lowering the limits on your cards to reduce your overall available credit will also help.

Avoid frequent job changes

As mentioned, lenders look for job stability as one of the most important elements in your personal loan application. Because of this, it’s recommended that you try to stay in the same place of employment wherever possible in the leadup to submission. For casual workers, you’ll need to have been working consistent hours in the same job for six months, while self-employed workers will need two years under their belts.

Secure your loan with a valuable asset

By opting for a secured loan, you’re already raising your potential maximum borrowing power up to $100,000, but by attaching a highly valuable asset, you can increase your chances of being approved closer to that figure. Lenders usually accept assets like cars, boats, caravans and motorcycles as loan security, so if any of these hold substantial value, it might be worth enlisting them as collateral.

Develop your savings

Lenders will look more kindly on borrowers who have shown that they’re disciplined enough with their finances to build their savings over time. Putting money aside and not spending it is the same skill required of loan repayments, as you need to be vigilant in leaving funds aside for your regular contributions each month. With savings, you also have something to fall back on if your repayments become too much to support on your income.

Add a co-borrower or guarantor

By submitting a joint application with your partner, you can increase your borrowing power by raising the overall income supporting the loan. Similarly, because a guarantor adds security to your loan by guaranteeing its repayment, lenders may be willing to approve you for greater sums than you’d receive otherwise. Both of these will help lower your interest rate also.

Compare lower-cost loans

Finally, choosing a personal loan with lower interest and few to no fees is likely to help you borrow more. This is because less of your repayments will be taken up by added costs, expanding your monthly borrowing capacity which can then be extended to your loan as a whole. You can do this right here with Savvy, as we gather the lowest-cost loan offers from our lenders all in one place.

Some of the common personal loan questions

Should I get personal loan pre-approval?

Yes – pre-approval is a handy way to find out your maximum borrowing power directly from the source, as your lender provides you with an in-principle approval. This can also provide you with an indication of what your interest rate will be. However, pre-approval doesn’t serve as a guarantee that you’ll be approved for the same terms down the line.

Will the purpose of my loan affect how much my lender approves me for?

No – if your maximum borrowing power is $20,000 over three years, it doesn’t matter whether you’re looking to consolidate existing debts or take an overseas holiday. However, it’s important to note that if you’re consolidating other debts to lessen your overall financial commitment, that can free up more money for you overall to potentially borrow more or take out another loan.

How long can I take to repay my loan?

You can apply to repay your loan over as short a time as 12 months or as long as seven years. It’s important that you choose a lender who offers a term over which you feel most comfortable over which repaying your loan; you shouldn’t pay more interest than you need to because your lender doesn’t offer your preferred short term or be that much less comfortable each month by being forced into a shorter term.

Which documents will I need to supply with my application?

The main documents required for a personal loan application are:

  • Your passport and/or driver’s licence
  • Your last two payslips (90 days of bank statements and your employment contract may be requested also)
  • Information on any outstanding debts
  • Your internet banking information
  • Proof of address (potentially via a recent utility bill)
Does the size of my loan affect the speed of approval?

It can – if you’re applying for a larger secured personal loan, it may take more time to process given the need to assess the quality and condition of your proposed security. Also, if the loan amount doesn’t fall comfortably within your borrowing power, you may not be automatically approved in the same way you would be if you took out a small loan well within your limitations.

Am I able to apply for my personal loan online?

Yes – almost all personal loan applications are conducted 100% online. Our panel of lending partners all operate in the online space, giving you access to any of them at any time of day and from all corners of the country. All forms and documents are submitted and signed digitally.

Helpful personal loan guides