Most Common Uses of Personal Loans in Australia

Find out more about some of the most common uses for personal loans among Australians, as well as how much is being spent, with Savvy.
Published on November 19th, 2020
  Written by 
Thomas Perrotta
Thomas Perrotta is the managing editor of Savvy. Throughout his time at the company, Thomas has specialised in personal finance, namely car, personal and small loans, although he has also written on topics ranging from mortgages to business loans to banking and more. Thomas graduated from the University of Adelaide with a Bachelor of Media, majoring in journalism, and has previously had his work published in The Advertiser.
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   Reviewed by 
Bill Tsouvalas


Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Personal loan purposes: by the numbers

  • The most common purpose for personal loans is vehicle purchase, with 59% of all applications being for this reason in 2023
  • The most common purpose for unsecured personal loans is debt consolidation, at 23% of requests across 2023
  • Home improvement was the next-most popular at 6%, followed by medical and dental expenses (3%) and travel (2%)
  • Other common personal loan purposes included weddings, vehicle repairs, investments and other bills
  • Investment loans were the largest on average at $44,814, followed by vehicle purchase ($34,827), home improvement ($24,333) and debt consolidation ($22,563)


Have you spotted a rise in personal loans lately in Australia? You aren’t alone. The Australian Bureau of Statistics (ABS) reported in its January 2024 lending indicators that the value of new personal loans rose to a whopping $2.459 billion across the month, which was the second highest ever recorded.

But what exactly are Aussies using these loans for? A handy study from lender Money.com.au based on their 2023 lending statistics sheds some light on the most common uses of personal loans in Australia. We've broken down all the key stats for you right here, so dive into the facts and figures of personal loan usage with Savvy today!

The most common uses of personal loans in Australia

According to Money.com.au’s study, over half of all loan requests received were for the purpose of purchasing a vehicle. 59% of the applications were seeking funds for assets such as cars, motorcycles, caravans and boats.

These loans are secured, meaning the vehicle purchased will serve as collateral for the loan. As a result of the added layer of security for your lender, you’re likely to receive a better interest rate than you would on an unsecured loan.

While this also means that, in theory, your vehicle can be repossessed if you become unable to make your repayments, this is only a last resort by lenders and there are often hardship provisions which can be sought before this takes place.

The most common use of unsecured personal loan funds by far was for debt consolidation. Almost a quarter of all applications (23%) were stated to be for the purpose of consolidating multiple debts.

Debt consolidation can cover a variety of debts, such as outstanding personal and payday loans, as well as credit card, store card and other debts. They’re popular because they can add more flexibility to such debts and potentially enable you to shift them to a lower interest rate, which is especially the case for credit cards.

Behind debt consolidation was home improvement at 6%. This can include anything ranging from getting your plumbing fixed to funding minor and major renovations to your home.

Medical and dental loans were next at a combined 3%, while travel loans rounded out the top four most common uses in Australia at 2%. Other purposes listed by the study with less than 2% frequency include wedding loans, vehicle repair loans, investment loans and loans for other bills.

The average loan amount for different purposes

The study found that the average unsecured personal loan requested by Australians across 2023 was $22,643, with a repayment term of 35.4 months and an interest rate of 13.87% p.a. In contrast, the average secured personal loan amount was found to be $34,827.

However, the average amount varied depending on the cited purpose. The following table shows the average loan sizes for different purposes:

Stated loan purpose Average loan amount
Vehicle purchase
Home improvement
Debt consolidation
Vehicle repairs
Other purposes

It’s interesting to note that the average application for personal loans for investment was almost $10,000 higher than the next-highest, which was for vehicle purchase. Of course, there’s a much smaller sample size of investment loans compared to vehicle loans, which may be a contributing factor to this statistic.

The average loan amount for different age groups

The amount sought by applicants isn’t only impacted by the intended purpose of the funds but a range of other variables, one of which is their age. Money.com.au has compiled the following statistics relating to the average amount requested by applicants in different age groups:

Age group (years) Average loan amount

These figures make sense, as borrowing power is closely aligned with income, which is likely to be at its lowest in your younger years and once again around retirement age. As a result, 45 to 54-year-olds and 55 to 64-year-olds request the greatest loan sums at averages of $27,936 and $27,694, respectively.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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