Apply For A Loan – What To Know About Loan Applications

The price of life seems to be on the up-and-up lately, meaning it is prevalent to need to apply for a loan. It also means that the lending industry is booming, and there seems to be no limit on what you can borrow for.

The economic environment is created within the fine print, however. Meaning that there’s a lot to know if you are new or not well-versed in the world of lending. Whether it’s a bank loan, a motorcycle loan, or 24/7 payday loans, there’s a lot to read up on. At Monzi we’ve tried to simplify it as best as possible to introduce you to the topic of loans smoothly.

Please note, specific ideas and products presented in this article may not be on offer by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What does it mean to apply for a loan?

When you apply for a loan, you request permission to use a third party’s credit for your needs. This happens to avoid having to save up for an extended period to make a large purchase. Property, for example, might be entirely unattainable for most of society without access to a mortgage loan.

As might be cars, and boats and several other fun wants that people may have. However, on a smaller scale, some people may apply for a loan for a little extra help to get by. The overarching notion here is that loans can help if you use them correctly. If you misuse a loan, intentionally or not, they also can hinder you. Having a thorough understanding of any loan you take may prevent this.

Essentially, when a financial institution or individual lends you money, it will be accompanied by a rate and a term. The term is how long you have to repay. Depending on the type of loan, your term could be anything from approximately a couple of months to 30 years. The rate is the interest you accrue while the loan is outstanding. The faster you pay your loan back, the cheaper it will be as you won’t be letting interest accrue.

How to apply for a loan?

Exactly how you apply for a loan depends on the type of loan and the lender you are obtaining it from. Generally, however, you will have to place an application, first. Once your application is received, a lender will conduct their assessment to see if you are eligible. If your application is approved, you will have to complete the formalities and sign your contract, and the money is yours. However, it isn’t as simple in real life as it is on paper. With some lenders, the process is complex and can take a couple of weeks or even a few months to conclude.

This is where Monzi can step in. If you are after personal loans of $300 to $10,000, we can fast track the process. Monzi is a lender-finder. This means that we can match you to a lender for the total cost of free, potentially within 60 minutes. From there, your lender will contact you and offer you a contract. Should you choose to sign, then the process is complete. The money could potentially be in your bank account on the same day of application. This is just the basics of how we operate; you can read more through this article or learn how it works. Our goal is to take the hassle out of your personal loan application.

Why would you apply for a loan?

The reasons you might apply for a loan can be endless. Generally, the most common loan that most people will apply for in their lifetime is a home loan. This is because the property market in most places is too high for the average person to pay for their home in cash. Some other typical loans you may apply for and motivations for this could include:

  • A travel loan: travel is expensive. Whilst it is advised that you use savings for the bulk of your holiday, a travel loan might enhance your trip.
  • Green loans: these loans are for renewables. Whether that’s solar panels, solar heating, or an electric car, green loans can help.
  • A white goods loan: white goods, particularly for families, are necessities for day to day life. If your white goods break, get help to replace them quickly.
  • Relocation loans: moving isn’t easy. If you need removal vans, plane tickets or cleaning services, these loans can help out.
  • Medical loans: not everyone can afford private health insurance. If you need a helping hand with medical bills, a loan can lift the burden.

These are just some examples as to why you might apply for a loan. The list is genuinely almost endless. If you know you have the capacity to repay a loan, consider how one might be helpful to you.

What do you need to apply for a loan?

Monzi can’t speak for all lenders regarding the documentation and criteria their loans may require. We can, however, tell you what you’ll need for our loans, and you may be able to use this to get a base understanding of what other loan types may request.

Monzi will need you to be at least 18 years of age, an Australian citizen, or a permanent resident. You will need to show a valid email address, a valid mobile number, and the past three months of bank statements showing a regular income. Of course, our process seeks to be painless and give you fast outcomes. Other lenders and lender-finders may ask for a lot more documentation.

Home loan lenders, in particular, may need to collect an arm full of documents to verify that you can undertake the responsibility of such a big loan. This documentation could include multiple pieces of identification, more bank statements, bills, proof of asset ownerships…the list goes on. However, a general rule of thumb is that you will need to be 18 to apply for any kind of loan.

What credit score do you need for a loan?

According to the credit bureau’s scales, the ranking you need for most loans needs to be good or better. Multiple credit bureaus can generate you a credit report. However, the giants are Equifax and Experian. Equifax has a range of 0 to 1,200, whereas Experian has a range of 0 to 1,000. Each rating on this scale correlates with a different score bracket; they look like this:

  • Excellent: 800 – 1,200
  • Very good: 700 – 832
  • Good: 622 – 725
  • Average or fair: 510 – 624
  • Below average or weak: 509 and below

The above depiction combines both scales to give you a rough idea of what you can expect your rating to be, based on your score. You can read a more accurate representation in our credit report article. Typically, however, the rating of your score will need to be at least in the good range for you to qualify for most loans. This is not always the case, however.

How can you apply for a loan with bad credit?

There are instances where you can get loan approval if your credit score or report is ‘bad’. Typically these are loans that are granted to you by private lenders. Private lenders have no association with a financial institution and can thereby be more flexible with their approval criteria.

The lenders Monzi works with are primarily private lenders. This means that some network members may be willing to grant you loan approval if you have bad credit. Or, in some instances, you may even be able to attain no credit check loans. This is because Monzi lenders and other individual lenders are often more willing to look at the big picture than a traditional bank lender may be. By the big picture, we mean your income, employment and other life circumstances. Monzi lenders know that life can go awry and may be sympathetic to this throughout your application assessment.

Can you apply for a loan online?

Yes. As the world progressively becomes more and more digital, it only makes sense that you can apply for loans online. Even banks are moving some of their services online to keep up with the desires of the customers. In this case, these desires are to place an application from the comfort of your home.

Monzi, however, is already well established with our online operations. We are 100% online, meaning your application and any interaction you have with us can occur wherever you have an internet connection. Being a 100% online company also allows us to cut down on the paperwork, which is good for you, us, and the trees. Gone are the days of driving to your local branch just to drop in some paperwork. Which means we’re saving you fuel too.

How long does it take to apply for a loan?

The application process itself, for most loans, is usually the most straightforward part. The length of time it takes usually correlates with the amount of documentation you need to provide. No wonder Monzi’s application process is so speedy.

Realistically, however, if you have all your documentation compiled, you can make the application easy for yourself. This isn’t just a rule of thumb for loan applications but also for any applications you may make that require documentation. Do yourself and the company a favour by knowing what you need and compiling this information in advance.

How does a bank loan work?

Bank loans work just like any other kind of loan. They grant you money, and you repay it and any interest promptly within the loan term. The only difference with a bank loan is that you may be required to have good credit as a minimum. The higher your credit score is, the more money you may be entitled to.

This is the norm with almost all loans, however. The better your score, the more credit you can access. Monzi lenders operate the same. If you apply for a $10,000 loan with a Monzi lender, they may counteroffer you if they find you don’t qualify. Meaning your lender could say that they don’t believe you have the capacity for your original request. However, rather than rejecting you, they may say you’re eligible for $5,000. This can be very convenient as, more than likely, if one private lender rejects you, they all will. Something may be better than nothing.

How to apply for a loan

How do private loans work?

Private loans, also known as personal loans and peer to peer lending, are the type of loans you can find through the Monzi lender-finder. Private loans are often far more flexible than bank loans as they do not have to be as strict with their money and, thereby, their criteria. One of the conditions of private loans is that they tend to have higher interest rates than other loan types. This is because their money is more valuable to them than the bank’s money is to it. Charging a higher interest rate means your lender won’t lose all their money if you can’t make your repayments.

You may also not need to secure your loan with private lenders in some instances. With Monzi, you may need to provide security when you apply for a loan greater than $2,000. This will vary by lender; however, if you only need a small amount of cash, our lenders won’t add the fuss of requiring your car as collateral. Just another way the Monzi lenders can make life easier for you.

What size loan can you apply for?

The amount you can apply for often correlates with the state of your credit score. If you have an excellent score, you could potentially receive credit for million-dollar home loans. If you have bad credit, you can expect only to access a few hundred dollars from a private lender.

In terms of the loan sizes you can access through Monzi, there are three tiers available to you. These are small loans, medium loans, and large loans.

Your lender may offer something slightly different from what we advertise on our site. The same goes for the accompanying interest rates. The information listed on our site is purely to give you an idea of how your loan might look.

Can it hurt your credit if you apply for a loan?

Yes, applying for a loan can hurt your credit. However, this may happen in a couple of different ways. The first possibility is that you apply too many times in a short period and receive multiple rejections. This will appear on your credit report and may make your lender doubt you considering so many other lenders already have. The second is that you successfully obtain approval; however, you fail or struggle to make your repayments. Missed or late payments will result in a mark on your report.

There is potential for a successfully obtained and repaid loan to help your credit report, however. Being responsible with your loan will look very good on your credit report and in your lender’s opinion. Borrowing credit doesn’t have to be scary. If you are responsible and your credit is productive, it can be an excellent advantage.

How to apply for a loan on Centrelink?

Before you even consider applying for a loan whilst already receiving Centrelink benefits, here are a few things you should first try:

  1. Speak with a financial advisor to see how well you are budgeting and whether you truly need a loan.
  2. Explore the government grants pages to work out if you are eligible for any money you are not already receiving.
  3. Ask Centrelink for a cash advance. This means you may be able to get your payment sooner.

If you have tried all of these avenues, then consider a loan. Some lenders may be willing to accept regular, substantial Centrelink payments as a valid form of income. However, this is not always the case. Lending to someone who is already struggling with money is risky. You may only be eligible for small cash loans; however, this is better than being completely prevented from obtaining a loan.

When is a good time for a loan?

It’s hard to say when a good time for a loan may be, as this is dependent on you and the current events in your life. You may consider a quiet patch in your life as an excellent time to take a renovation loan and get those projects done around the house. Maybe a good time is as soon as a pipe bursts in the bathroom, and you need some extra money to cover the costs of a plumber. See what we mean about it depending on your situation.

Conversely, it may not be a good time for a loan if you already have a significant amount of debt. It also may not be the right time if you just had a new baby and cannot afford any more monthly expenses. There are several reasons why a loan may not be the right option for you. To ensure you are doing the right thing by yourself and your family, seriously consider your position in life before seeking a loan of any kind. If you are struggling consider contacting the National Debt Helpline, or explore the Australian government’s MoneySmart site for advice.

Where can you apply for a loan?

There are three ways you can place a loan application these include:

  • Online: the quickest and easiest way to apply for a loan is online. Keep in mind that this will not work for all loan types; however, if you seek a personal loan, Monzi is online and ready to help.
  • Through a finance broker: If you are planning on utilising the services of a broker for your loan, whether personal loan broker, an investment broker or a mortgage broker, they can help you place your loan application.
  • In branch: If you prefer the traditional method of going directly to your bank, you may be able to apply for a few types of loans at your local branch. Keep in mind that this may not be the most convenient option of the three.

Each option is slightly more nuanced than mentioned above. However, this is a basic rundown of where you can place your loan application. Specific methods may only work for certain types of loans or exact loan amounts. Consider the right option for you before rushing into a loan application of any description.

Can you apply for a loan with your partner?

Yes. Depending on the loan you are seeking, you may have the option of jointly applying with your significant other, via a joint personal loan. This is commonly for large loans such as mortgages, particularly a first home loan where you may require a second income for a successful application. However, there are several ways to split a loan contract and many potential people you can divide it with. For example, if you intend to start a business with a second or third person, you may be able to split your business loan multiple ways on the contract. Or, if you are buying a family car, you might be able to split car loans.

There are many other loans this might work for, potentially including a construction loan or caravan loans. It is quite often your relationship with the other person that will be your lenders deciding factor. For example, it is becoming quite common these days for home loan applicant’s parents to go guarantor on their loan. This is the act of agreeing to put forward your home’s equity to guarantee your child’s loan approval. Given the nature of this kind of loan, only immediate family members are generally able to form a guarantor loan. If you want to apply for a loan with another person, speak with your lender about what you can and cannot do.

Budgeting loans

One of the most important aspects of any loan is managing it. A neglected loan of any size can quickly get out of hand. Ensure you create a detailed repayment plan for any credit you receive. If you are a spender at heart, this will be even more important. Track your cash flow, keep a savings account and an emergency account. Automate your savings if it helps. Multiple budgeting options could work for you.

If you need help creating a budget and sticking to it, reach out to a financial advisor for assistance. The golden rule of borrowing money is to ensure you have the means to repay it. A little initiative in this department will go a long way to ensuring you stay on track with your repayments. If you are unsure whether you will make your repayments before you apply for a loan, try using a loan repayment calculator. These free tools are a great way to help you work out in advance whether a loan will fit your budget.

Do you need security to apply for a loan?

Whether or not you will need to put forward collateral when you apply for a loan depends on three things; the type of loan, the loan amount, and the lender. For example, if you are seeking a mortgage loan, you will need to put forward a deposit in the form of a percentage of the total loan amount. If you are applying for a car loan, you will most likely secure it against the vehicle you are buying.

When applying with Monzi, however, whether you require security is typically determined by the loan amount. If you are looking to apply for anything under $2,000, you may not need security. Anything over, and you may have to nominate an asset. However, this is just a rough idea of how this might work. Your lender has the final say on whether or not you will need to provide security. This is as the terms for each of the lenders in our network will vary depending on individual guidelines.

Apply for a loan with Monzi

Applying for a loan through Monzi couldn’t be easier. We aim to help match you to a lender in potentially as little as 60 minutes. If you feel like you need a little extra cash to get things done, consider how we may be able to help you.

If you have any questions about how we operate, don’t hesitate to contact our friendly team at

Want to keep in touch?

Don’t be shy, let’s be friends. Need a loan later and don’t want to forget us? Had a good experience and can’t stop thinking about us? Why not head over to our socials? You can follow us on our Facebook, Instagram, Twitter and Pinterest, to keep in the loop. We look forward to seeing you there!

Would you like to read more about protecting your family’s future? If so, why not check out our child care subsidy calculator article? Or, learn about the retirement income calculator.

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440.

Disclaimer: Under the current legislation, all Small Amount Credit Contract loan providers don’t charge an annual interest rate. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The comparison rate on loans between $300 and $2000 could be up to 199.43%. The minimum loan term is 16 days and maximum loan term is 12 months. Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan.

Loan amount

$2,100 - $4,600


13 months (minimum)

24 months (maximum)


47.8% Annual Percentage Rate (APR)

65.85% Comparison Rate p.a.


Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88.

The maximum interest rate for a Medium Amount Credit Contract is 47.8%. Comparison Rate 65.85% p.a. The maximum loan term is 24 months. Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.

Loan amount

$5,000 - $15,000


13 months (minimum)

24 months (maximum)


17% Annual Percentage Rate (APR)

36% Comparison Rate p.a.


Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489.

The starting interest rate for a Personal Loan is 17%. Comparison Rate 36% p.a. The maximum loan term is 24 months. Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.