Personal Loans for 18-Year-Olds

Find out what the best loan to suit your needs is as a young adult by comparing your options with Savvy.

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, updated on October 4th, 2023       

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There are several different options that borrowers at 18 years of age can look to when applying for a personal loan. Because of their lesser experience when it comes to taking on and repaying debts compared to an older borrower, applications of this nature are considered a greater risk. As such, options are essentially limited to the following loan products:

Unsecured personal loans

The most common type of personal finance, unsecured personal loans give borrowers the ability to take out a loan without supplying an asset as collateral. This makes them a more attainable loan type for younger borrowers who may not own an asset suitable to use for this purpose.

While unsecured personal loans can range from as little as $2,000 up to as much as $75,000, you’re unlikely to be approved for larger sums if you’re unproven as a borrower. Unsecured loans also come with higher interest and fees than other types, but they’re a viable option, nonetheless.

Secured personal loans

On the off chance you own a car, or other valuable assets like art or jewellery that you might’ve inherited from a family member, you may wish to use it as security on your personal loan. This can expand your borrowing power beyond $75,000 with some lenders (if you can afford it) and reduce rates and fees.

The one thing to note about secured personal loans is that they place restrictions on the asset that you use as collateral. For example, should you use your car, you likely wouldn’t be able to make major modifications to it or trade it in as part of your next vehicle purchase.

Student personal loans

Student personal loans are essentially just personal loans taken out to be used for educational expenses. This can be anything from student accommodation, textbooks, laptops, transport to and from your educational institution or anything else.

Just because they’re called student loans doesn’t mean that they can solely be used for this purpose, though. They’re just as flexible as any other loan when it comes to how you can use them.

Small personal loans

Alternatively, an option you may be required to pursue if you don’t meet all of your lender’s criteria is a small loan. These are suitable for smaller amounts between $300 and $5,000 and come with broader eligibility criteria that make it easier for people in unconventional financial situations to be approved.

You can repay your small loan over a period as short as 16 days up to two years (for amounts above $2,000) and experience fixed, capped fees and no charges for repaying your loan early. They’re ideal for emergencies, too, as you can have the money in your account in as little as one hour.

Types of personal loan

Why compare personal loans through Savvy?

How to increase your personal loan approval chances

Frequently asked questions about personal loans for 18-year-olds

Can I count Centrelink benefits as part of my income?

Yes – but not all Centrelink benefits are considered eligible sources of income. The following are usually accepted by lenders who are able to work with government benefits:

However, payments such as JobSeeker, Youth Allowance, Austudy and ABSTUDY aren’t considered acceptable income sources on personal loans, as they’re conditional on an age, employment or study status which can change unexpectedly.

What happens if my application is rejected?

There’s a chance that, upon rejection, your lender will return to you with a counteroffer for an amount they’d be willing to approve you for. This generally occurs when you meet all of their criteria otherwise, but don’t pass their affordability check. If your application is outright denied, you should be careful before submitting your next one: each unsuccessful application goes on your credit file and too many in quick succession can reduce your approval chances.

How long can I take to repay my loan?

For a standard personal loan, the length of time you can take to repay your loan depends on the amount you’re borrowing. For instance, your lender may only let you take one to two years to borrow a low amount like $5,000 but, were you to borrow upwards of $30,000, it’s likely that five or more years would be accepted. Because 18-year-olds aren’t likely to be approved for large sums, you’ll probably be required to repay your loan over a term on the shorter end of the scale.

Can my employer help me get approved?

Yes – in some cases, particularly when you’re a casual employee and/or have only been employed for a short time, your employer can submit a letter reaffirming your job security to your lender. This can help boost your approval chances when you otherwise may not have been accepted for financing.

What documents will I need to apply for a personal loan?

When you apply for your personal loan, you’ll need the following documents as part of your lender’s requirements:

  • Your last two payslips (90 days of bank statements and employment contract may be required)
  • Any applicable Centrelink income statements
  • Photo ID in the form of your driver’s licence and/or passport
  • Internet banking details
  • Information on any existing assets and liabilities
Am I able to refinance my personal loan later?

Yes. This can be a great way to save money if you have minimal credit history, as you can access a lower interest rate than you had access to at the time that you took out your personal loan.

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.