7 things to know about personal loans

As a responsible lender, it's our job to ensure you're getting a fair deal on a loan that's tailored to you – but first, let's take a step back and unpack what a personal loan is, how it works and what you can use one for.

What's in this guide?

Q1: What is a personal loan?

Simply put, a personal loan is a form of credit lent to you by a credit provider to fund a purchase you may not be able to pay for upfront. You might be the savviest saver in the world, but it's difficult to save enough to buy a brand-new car or pay for a huge home renovation with cash. That's where personal loans come in handy. They allow you to buy or do the thing you want now and pay it back over time. The catch? You pay some interest on top of the loan amount.

Q2: How do personal loans work?

The way personal loans work in Australia varies between lenders. There are enormous differences depending on who you borrow credit from. A payday lender may charge a huge amount of interest and expect you to pay your debt back within a matter of weeks, while a mortgage lender might lend you a lot of money at a low rate and give you half a lifetime to pay it back.

With personal loans, lenders generally offer amounts between $5,000–$100,000 and can set a rate anywhere between 4–25% over a term of 3–7 years. Of course, these conditions will vary between lenders and can be influenced by your credit history, the lender's policy and the general interest rate environment at the time of application.

Wisr offers unsecured personal loans from $5,000 to $50,000 with flexible loan terms of 3, 5 or 7 years.

The process generally goes like this:

  • You get a rate estimate for your desired loan amount

  • You continue with your application

  • Once approved, you choose your repayment option and sign the agreement

  • Your funds are released to you

  • Then, you make your regular repayments until the loan is repaid in full

Q3: How do I apply for a personal loan?

Before you apply for a personal loan, there are a few things to know first.

It's smart to do your research – find a lender that offers a personalised rate, flexible terms and eligibility criteria that fit your circumstances. 

Some lenders like us allow you to get a rate estimate before you submit your application, so you can get an idea of what they can offer you interest rates and monthly repayments.

This means you can shop around for a fair deal without negatively impacting your credit scores. 

Make sure you understand what you're submitting – you don't want to accidentally apply for multiple loans at once and have your credit score damaged by frequent credit enquiries. 

Once you have a couple of loan options on the table, compare them to determine which is right for you. Take note of the interest rate, fees and loan terms. Is there a penalty for paying off your loan early? Are there any additional tools you might find helpful? 

At Wisr, we don't charge any early repayment fees. We offer flexible repayment options to suit your needs, and we've even built an app to help you pay your loan off faster.

To apply for a personal loan, you'll need various documents, including your I.D., proof of income and bank statements. You may be asked for additional documentation during the assessment process, so be prepared for that.

Q4: How do I choose the right loan for me?

There are plenty of sites that make comparing loan options quite easy, but it's worth doing some extra research on the lender's website to ensure you're making the right move. 

Taking out a personal loan is a pretty big decision. You're not just buying a product – you're essentially entering into a long-term relationship. It's important to take the time to make sure you're a good match. For this reason, you may step back and assess the lender from a holistic perspective. Do they share your values? Do they lend responsibly? Are they giving back to the community? 

At Wisr, we’ll design a loan that meets your unique needs and we’ll help you to pay it off. 

As Australia's first purpose-led FinTech, it's our mission to bring financial wellness to all Australians so we offer:

Q5: What's my credit got to do with it?

When applying for any type of credit, your credit scores will be taken into account. A lower credit score can limit your borrowing capacity and sometimes even nudge you out of the running for a personal loan altogether. A higher score can give you the gift of choice between lenders, loan terms, repayment frequency and even interest rates. 

It's also worthwhile checking your credit report regularly so you can stay on top of any suspicious behaviour and spot any mistakes that might come up. Combing through your credit report for the first time can be overwhelming, but we've made things as simple and easy to understand as possible on the Wisr dashboard

In our 'How to read your credit report' guide, we explain what information is recorded in the various sections and walk you through the factors that have a high, medium and low impact on your scores.

Q5: Where can I see my credit history in Australia?

Credit scores are generated by credit reporting bureaus CRBs. They collect data relating to your borrowing history and how good you are at paying your bills to paint a picture of your creditworthiness. 

In Australia, there are three major ones – Equifax, Experian and Illion. Lenders like Wisr can request a credit report from one or more of these bureaus when assessing a loan application.

Q6: What is Comprehensive Credit Reporting?

Before Comprehensive Credit Reporting CCR was introduced in 2014, your credit reports were like a black-and-white movie with no sound. Lenders could get the gist, but they only displayed minimal information, and almost all of it was negative. Then CCR came along, and suddenly your credit file became a full colour, surround sound masterpiece. Well, perhaps we're exaggerating a little.

In short, Comprehensive Credit Reporting paints a much fuller picture of your credit history. It includes reporting on your repayment history and more contextualised information regarding periods of financial hardship.

Q7: What affects my credit scores?

There are many factors that can impact your credit scores. The most obvious ones are credit enquiries, i.e. when you apply for a credit product. Another major factor is missed or late repayments on existing credit accounts. But there are plenty of surprising factors that you probably aren't aware of.

How do I build my creditworthiness before I apply for a loan? 

Building a solid credit file isn't something that happens overnight. It's the small, consistent steps that help raise your credit scores and fill out your credit history. As the name might suggest, the key factor is time. Demonstrating smart credit behaviour over a long period is the best way to build up your credit history. 

The good news is that if you have a few hiccups, such as missed repayments or periods of hardship, these are removed from your file after a set period. Most credit impairments are wiped from your file after 2-5 years.

How do I improve my credit scores?

To improve your credit score, you want to take a good, hard look at your financial situation. You can identify problems and look for ways to fix them. Once you get a hold of your finances, your credit rating should go up. 

A few simple ways to improve your credit scores include consolidating high-interest debt, limiting new credit enquiries and paying your bills on time. We share even more ways to improve your credit score in this guide.


  • Paying bills on time

    Stay on top of your phone, utility and internet bills.

  • Reducing high-interest debt

    Close those credit cards and smash down any high-interest debt

  • Keep an eye out for errors

    Check your credit scores regularly to stay on top of suspicious activity.


  • Applying for multiple lines of credit at once

    Try to spread out your enquiries. 

  • Changing address, telco or utility providers too often

    Try to minimise the number of enquiries conducted on your credit file.

  • Missing repayments

    If you're having trouble meeting your obligations, speak to your lender.



Check your scores to find out what shape your scores are in, what's impacting them and how to improve them. This doesn't hurt your scores!


How can I check my credit scores in Australia?

You can check your credit scores for free with Wisr. We do a 'soft check' which doesn't negatively impact your credit scores. All you need to do is create a Wisr profile, visit the dashboard and generate your credit reports. You can also check your scores with Wisr App on iOS or Android.

You'll receive scores from Equifax and Experian – two of Australia's major credit bureaus. They'll be slightly different, but don't worry. That's normal! If you spot anything amiss or don't see your credit scores, get in touch.

Why are credit scores important?

  • They give you freedom. By helping illustrate your ability to honour a loan, your credit score allows you to borrow money for whatever you wish.

  • They can help you find a home. If you're a renter, some landlords will show a preference for those with good credit scores.

  • They can score you a better deal. A better credit score can sometimes mean a lower interest rate for you. Wisr personal loans reward people with strong credit scores.

Your credit score is not the only factor lenders look at, but it typically plays a role. You can check your standing with our Credit Scores tool.

Will checking my credit scores affect them? 

This is the biggest credit myth out there! We make a 'soft enquiryʼ with participating credit reporting bureaus. A soft enquiry or 'soft check' or 'access seeker enquiry' occurs when either you or an authorised third party appointed by you checks your credit reports. 

Soft enquiries do not impact your credit scores.

Did you find this content helpful?

Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.

James is a marketing and communications professional with a passion for leading high-performance teams. He likes what he does… a lot.

James, Chief Growth Officer

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