Are you a student looking to apply for personal study loans? Read on to find out more.

In this article

• What are student loans?

• What is a personal loan for students?

• What can I use the student personal loans for?

• Am I eligible for a student personal loan?

• How to compare student personal loans?

• Can I get student loans for bad credit?

• What student loans can I get from the Australian government?

• Do you have to be an Australian resident to get a student loan?

• Are there age limits on who can get a student loan?

• What are the pros and cons of student personal loans?

• Conclusion

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Juggling studies and paying for your college education is easier said than done. While an education loan can help get your tuition fees covered, student loans don't always cover the entirety of the fee. Moreover, there are so many other expenses students need to take care of.

But there is no need to get disheartened -- if you are a cash-strapped student, a personal loan is one option worth researching.

Here's everything you need to know about applying for personal study loans in Australia.

What are student loans?

Student loans are a form of personal loan specifically meant for students to pay for their college or university education.

Like a regular loan, students can borrow a fixed amount of money and use it for pre-approved expenses. The loan amount must be repaid to the lender along with interest over a pre-determined period. Lenders in Australia also offer such personal loans for international students though there are strict requirements about the kind of visa the student must hold.

In addition to private lenders, the government also provides student loans to Australian residents.

What is a personal loan for students?

Personal loan for students refer to financial assistance students can avail to pay for expenses related to their studies, including daily expenses incurred. It is an all-purpose loan where the proceeds can be used to pay for tuition fees and living expenses. Typically, student loans are borrowed to pay for professional degrees in colleges or universities as the cost of such courses is significantly higher.

Such loans are not just available for those studying at university but also for those undertaking vocational training.

Personal loans for students are distinct from educational loans. Unlike a personal loan, educational loans cannot be used to pay for any expense apart from the tuition fee. But unlike educational loans, there is no moratorium on the repayment of personal loans. Repayment of the personal loan begins as soon as the funds are provided.

What can I use the student personal loans for?

There are a variety of expenses that you can meet using the proceeds of student loans. However, keep in mind that the lender may impose specific restrictions on the utilisation of personal student loans. So make sure to read through the terms and conditions carefully.

Below is a quick overview of typical end uses:

Tuition fees

If you are not eligible to apply for any government assistance, you can apply for personal loans for students and use the proceeds to pay the tuition fees of your course.

Course books, equipment and software

Any student at an Australian university spends a large amount of money purchasing course textbooks, electronic devices such as laptops and tablets, and specialised software licenses such as Adobe Photoshop.

Paying out of pocket for such recurring expenses can be an uphill task. Availing of education loans in Australia can help students meet the costs without paying out of pocket.

Living expenses

For most courses, you either need to stay on the university campus or look for accommodation off-campus.

Getting a personal loan for students can help you cover the living expenses.

Am I eligible for a student personal loan?

Like any financial product, student loans in Australia also have strict eligibility criteria.

While credit providers have their own set of conditions you must fulfil to apply for a loan, here's what most private lenders require:

• The loan applicant should be at least 18 years and above

• Should be an Australian citizen or a permanent resident

• Must be employed on a full-time or part-time basis

• Should have a good credit score. If the primary applicant doesn't have a credit history, the credit score of the co-applicants, such as parents, would be considered.

And can international students get personal loans in Australia? Some lenders may provide personal loans to international students, provided they hold valid visas. Confirm the eligibility requirements of the shortlisted lenders before you send in your application.

Financial assistance provided by the federal government also has eligibility conditions such as residency status and income level of the household. However, there is usually no minimum credit score prescribed.

How to compare student personal loans?

Here's what you should consider when comparing loans for students in Australia:

Interest rate

Like all loans, the interest charged on loans for students is one of the first features to consider when comparing your options. The interest rate decides how much it will cost you to borrow.

It is better to go for a fixed-rate loan if you want to ensure that you can repay the loan on time. Variable interest rate loans are better for those who desire more flexibility in loan repayments and want market forces to determine how much they need to pay monthly toward repaying the loan.

Manner of funding

Some lenders may fund study loans in Australia in tranches. In other words, they may release a portion of the funds throughout the life of your course. Other lenders may provide a lump sum amount.

Which is a better option for you depends on the educational institution's requirements -- do they want you to pay the total fees at once or over a period of time.

Repayment tenure

Usually, borrowers have the flexibility to decide the repayment schedule for personal loans for students in Australia. You can opt for fortnightly or monthly repayments, depending on your budget.

Term of your loan

The loan term decides how much time you have to repay the loan. Typically, it is between two to five years. A longer-term provides more flexibility for repayment even though you may end up paying a higher interest. A shorter term means bigger instalments but helps you save on total interest.

The term becomes even more crucial for loans for international students in Australia as it dictates how much time one has to secure employment in Australia to pay off the loan. Choose the term based on your financial situation.

Need for collateral

Typically, student loans are unsecured. You don't have to offer any valuable asset to borrow the loan. However, lenders usually charge higher interest on unsecured loans to cover the lending risk.

In such cases, a secured loan where you can offer assets, such as a car or equity in a home, can lower the interest rate and make it more affordable to borrow. If you cannot afford the interest charged, check if you can borrow a secured loan.

Secured vs unsecured student loans: which is right for you?

Choosing between a secured and an unsecured student loan comes down to whether you have an asset to offer as collateral and how much you want to pay in interest. The table below summarises the key differences.

When does a secured student loan make sense?

A secured loan is worth considering when you own a vehicle, have equity in a property, or hold term deposits that can serve as collateral. By offering security, you reduce the lender's exposure and may access interest rates several percentage points lower than an unsecured alternative. Over a three- to five-year term, that difference can translate into hundreds - or even thousands - of dollars in savings. This option is particularly useful for students who need to borrow a larger sum to cover both tuition and living costs.

Is it difficult to get a secured loan as a student?

The approval process is not necessarily more difficult, but it does involve extra steps. The lender will need to value the asset you are pledging, which can add a few days to the timeline. You will still need to demonstrate the ability to repay - through part-time employment or other income - but because the collateral lowers the lender's risk, applicants with average credit scores often find it easier to qualify for a secured loan than an unsecured one. If you do not own an asset, an unsecured loan or a government-backed option such as HECS-HELP may be the more practical route.

Can I get student loans for bad credit?

A bad credit score doesn't automatically disqualify you from applying for student loans in Australia.

In most cases, any financial assistance the federal government provides doesn't involve any credit score assessment. If you fulfil the other eligibility conditions, applying for government-sponsored loans is your best bet when you have bad credit.

Most private lenders evaluate your creditworthiness before approving your loan application. You may be charged a higher interest rate if you have bad credit. Consider approaching lenders who offer specialised credit products such as student loans for bad credit.

When you have a bad credit score, you must prepare strategically before sending off your applications. Check your credit score and make a list of options available. Speak to the lender before you formally apply -- lenders perform a credit pull to evaluate your loan application, which can lower your score further.

You can get your credit score for free by signing up with ClearScore.

How to get a student loan with bad credit in Australia

A low credit score can feel like a major barrier, but it does not have to stop you from funding your studies. Below are answers to the most common questions students ask about getting loans for students with bad credit.

What credit score do I need for a student personal loan in Australia?

There is no single credit score that guarantees approval across all lenders. In Australia, credit scores generally range from 0 to 1,200. Most private lenders look for a score in the "good" range - typically above 661 on the Equifax scale - before offering competitive rates. If your score sits below that threshold, you may still be approved, but expect a higher interest rate to reflect the additional risk the lender is taking on. Government loans such as HECS-HELP do not involve a credit score check at all, making them a strong starting point if you qualify.

Can a co-signer or guarantor help me get approved with bad credit?

Yes. Adding a co-signer - often a parent, guardian, or close family member - can significantly strengthen your application. The co-signer's income and credit history are assessed alongside yours, which may help you secure a lower interest rate or gain approval that would otherwise be declined. Keep in mind that a co-signer becomes legally responsible for repayments if you default, so both parties should be comfortable with the arrangement before proceeding. Some lenders refer to this role as a "guarantor," though the obligations are similar.

What are the biggest things hurting my credit score as a student?

Several common habits can drag a student's credit score down without them realising. The biggest killers of credit scores include:

• Missed or late bill payments - even overdue phone or utility bills can appear on your credit file.

• Multiple credit applications in a short period - each hard enquiry is recorded and may signal financial stress to lenders.

• Carrying high balances on credit cards - using most of your available credit limit lowers your score.

• Defaults or court judgments - unpaid debts that escalate to collections have a severe, long-lasting impact.

Checking your credit score regularly with ClearScore helps you spot issues early and track your progress over time - and it is completely free.

Step-by-step: improving your credit score before applying

If your application is not urgent, spending a few months strengthening your credit profile can save you thousands in interest. Follow these steps:

• Check your credit report for errors. Sign up with ClearScore to view your report and dispute any inaccurate listings with the relevant credit reporting body.

• Pay all existing bills on time. Set up direct debits or calendar reminders so nothing slips through.

• Reduce outstanding debt. Pay down credit card balances and avoid taking on new debt while you prepare your application.

• Limit new credit enquiries. Each application triggers a hard check, so only apply when you are confident you meet the lender's criteria.

• Keep old accounts open. A longer credit history works in your favour, even if you rarely use the account.

Even small improvements over three to six months can move your score into a bracket that may help you access better loan terms.

What student loans can I get from the Australian government?

Here's a look at various student personal loans in Australia provided by the government:

Student loans for university

You can apply for a HECS-HELP loan from the Australian government in case you are approved for a Commonwealth-supported place (CSP) at your university. Such loans for students help to pay tuition fees upfront.

A HECS-HELP loan is one of the interest-free student loans in Australia.

Student loans for TAFE or VET

If you enrol in vocational education and training (VET) or technical and further education courses (TAFE), you can apply for financial assistance from the government. Loans are provided for diplomas, advanced diplomas, graduate certificates, or graduate diploma degrees. The amount you are eligible to borrow is determined by the government and repaid through the Australian tax system once you cross the minimum income threshold.

Centrelink payments

Centrelink is a government agency responsible for providing social security support to Australian citizens. Eligible candidates can also apply for loans for students on Centrelink benefits. Centerlink offers various forms of financial assistance to cover the cost of living, such as through Youth Allowance, Rent Assist, Abstudy, or Austudy.

Do you have to be an Australian resident to get a student loan?

Usually, being an Australian citizen or a permanent resident is mandatory for obtaining financial assistance from the government.

For private lenders, residency is not necessary as they offer personal loans for international students in Australia, provided their visas are in order.

And Australian residents who cannot qualify for government assistance can also approach private lenders to borrow personal loans for education.

Are there age limits on who can get a student loan?

When it comes to providing loans for students, most lenders do not have an upper age limit. Applicants should be at least 18 years old to be eligible for any credit product, including a student loan.

However, the age limit may be an eligibility parameter for certain educational loans. It is best to check with your lender before you begin the application process.

What are the pros and cons of student personal loans?

Here's what you should consider before you apply for a loan for studies:

Pros

• Availing of student personal loans help you to fund education costs and build a bright future, especially when you don't have other financial resources

• The interest rate of such loans is lower compared to other financial products.

• Taking out a loan allows you to focus on your studies without worrying about how to pay for the course or living expenses.

Cons

• Repaying a student personal loan may become too costly if you cannot secure employment after completing your studies.

• If the credit profile of the primary applicant or the co-applicant of the loan is not strong enough, you may be charged a higher-than-usual interest rate.

• Deferring repayment instalments can push you into a debt trap, and you may end up paying more interest over the life of your loan.

How much does a student personal loan cost per month?

Understanding what your monthly repayments will look like before you borrow helps you budget realistically and avoid financial stress during your studies. The figures below are indicative examples based on typical personal loan interest rates in Australia - your actual rate will depend on your credit profile, the lender, and whether the loan is secured or unsecured.

Example monthly repayments at typical interest rates

The following examples assume a fixed interest rate and equal monthly repayments over the full loan term:

• $5,000 loan at 8% p.a. over 3 years: approximately $157 per month

• $10,000 loan at 8% p.a. over 3 years: approximately $313 per month

• $10,000 loan at 10% p.a. over 5 years: approximately $212 per month

• $20,000 loan at 8% p.a. over 5 years: approximately $406 per month

• $30,000 loan at 10% p.a. over 5 years: approximately $637 per month

These figures do not include establishment fees or ongoing account-keeping charges, which can add to the total cost of borrowing. Always check the comparison rate - it bundles interest and standard fees into a single percentage, giving you a clearer picture of the true cost.

How does the loan term affect your monthly payment?

Stretching the repayment period from three years to five years lowers each monthly instalment, but you pay more interest over the life of the loan. For example, a $10,000 loan at 8% p.a. costs roughly $313 per month over three years (total interest about $1,268) compared with $203 per month over five years (total interest about $2,166). Shorter terms are more affordable overall, while longer terms ease pressure on a tight student budget. Choose the balance that keeps repayments manageable without dramatically inflating your total cost.

What salary do you need to comfortably repay a student loan?

A common guideline is to keep total debt repayments - including any personal loan - below 20-25% of your after-tax income. If your monthly repayment is $300, you would ideally want a take-home income of at least $1,200-$1,500 per month. For many students working part-time, this is achievable at around 15-20 hours per week at the current minimum wage. Before committing to a loan, map out your expected income (from work, government allowances, or family support) against your repayment obligation to make sure the numbers add up.

Alternatives to student personal loans in Australia

A personal loan is not the only way to bridge financial gaps during your studies. Before you commit to borrowing, consider these alternatives that could reduce or even eliminate the need for a loan.

Scholarships and grants

Australian universities, private organisations, and government bodies offer thousands of scholarships each year based on academic merit, financial need, or specific fields of study. Unlike loans, scholarships do not need to be repaid. Search your university's scholarships portal and national databases such as the Australian Government's Study Assist website to find opportunities that match your circumstances.

Part-time or casual work while studying

Many students fund a significant portion of their living costs through part-time or casual employment. Most student visas (for international students) permit up to a set number of work hours per fortnight, while domestic students face no such cap. Even 10-15 hours of work per week can cover daily expenses and reduce the amount you need to borrow.

Employer-sponsored education programs

Some Australian employers offer study assistance or tuition reimbursement as a workplace benefit. If you are already employed - even casually - it is worth asking your employer whether they support further education. These programs may cover part or all of your course fees in exchange for a commitment to stay with the company for a defined period after graduating.

Interest-free options: BNPL for course materials

Buy-now-pay-later (BNPL) services can be a practical way to spread the cost of textbooks, laptops, and software over several interest-free instalments. Providers operating in Australia typically split the purchase into four equal payments with no interest charged, provided you pay on time. Use BNPL sparingly and only for essential items - missed payments attract late fees and may affect your credit file.

Using a low-rate credit card for short-term gaps

A credit card with a low ongoing rate or an introductory 0% purchase period can help cover small, unexpected expenses without the formality of a loan application. The key is to pay the balance before the promotional period ends, as standard credit card rates are significantly higher than personal loan rates. This option works best for minor, short-term gaps rather than ongoing tuition costs.

Conclusion

Now that you know how student loans work in Australia, make sure to explore this option if you need more funds to pursue a college degree, but only take on credit you can afford to manage and repay. Finding the right loan product suited to your needs may seem overwhelming, but it is possible.