Australians are borrowing more through personal loans than ever before, with $2.5 billion in new loans taken out each month. Understanding these trends can help you make informed decisions about your own borrowing needs.
Personal loans have become an increasingly popular financial tool for Australians managing everything from vehicle purchases to debt consolidation. Whether you're considering your first personal loan or comparing options for your business, these statistics reveal important insights about the current lending landscape and what it means for borrowers in 2025.
Here are the most important personal loan statistics shaping Australia's lending market in 2025:
Note: Figures are based on averages and may not reflect individual borrowing experiences.
According to the Australian Bureau of Statistics, Australians collectively borrow approximately $2.5 billion each month through fixed-term personal loans. This figure excludes loan refinancing, which accounts for an additional $200 million monthly.
Personal loan borrowing has reached all-time highs, showing steady growth since April 2020 following an initial decline during the early stages of the COVID-19 pandemic.
The data reveals interesting patterns in why Australians are taking out personal loans:
Dr Thuy To, Deputy Head of the School of Banking and Finance at UNSW Business School, notes: "This may suggest that some consumers are increasingly relying on borrowing to cope with rising cost of living pressures." - money.com.au
The average interest rate for personal loans in 2025 is 13.87% p.a. for unsecured loans. This represents an increase from previous years, reflecting the broader trend of rising interest rates across the Australian financial system.
Personal loan rates vary significantly based on individual circumstances, with credit scores having the most substantial impact on the rates offered to borrowers.
This substantial difference highlights the importance of maintaining a good credit score when applying for personal loans. (Your actual rate may vary depending on lender criteria)
Understanding why Australians use personal loans can help you determine whether this financing option suits your needs:
Primary Uses Include:
Different purposes typically require different loan amounts:
|
Loan Purpose |
Average Amount |
|
Investment |
$44,814 |
|
Vehicle Purchase |
$34,827 |
|
Home Improvement |
$24,333 |
|
Debt Consolidation |
$22,573 |
|
Wedding |
$15,811 |
|
Holiday |
$11,841 |
|
Medical |
$9,621 |
|
Dental |
$9,592 |
|
Vehicle Repairs |
$7,791 |
Location also influences borrowing patterns:
Personal loan borrowing varies significantly by age group:
|
Age Group |
Average Loan Amount |
Percentage of Borrowers |
|
18-24 |
$13,919 |
14% |
|
25-34 |
$20,469 |
26% |
|
35-44 |
$24,944 |
- |
|
45-54 |
$27,936 |
31% |
|
55-64 |
$27,694 |
22% |
|
65+ |
$23,306 |
7% |
Key insights:
Most personal loan borrowers fall into these categories:
These figures are based on the average loan amount of $22,643 and provide a baseline for understanding typical repayment commitments.
Personal loan borrowers in Australia maintain an average credit score of 801, which falls into the 'very good' to 'excellent' range. While this is lower than the national average credit score of 846, it demonstrates that most successful personal loan applicants have strong credit histories.
The average credit score among personal loan borrowers has been steadily increasing over time, suggesting that:
Several factors are likely to influence personal loan markets in 2025:
Understanding these statistics can help you:
While this data focuses on consumer lending, businesses can use these insights to:
The average personal loan amount is $22,643 for unsecured loans, though this varies significantly based on the loan's purpose, with vehicle loans averaging $34,827 and medical loans averaging around $9,600.
At an average of 13.87% p.a., personal loan rates typically fall between credit card rates (often higher) and secured loan rates like mortgages (typically lower). Rates vary significantly based on your credit score and loan terms.
While the average personal loan borrower has a credit score of 801, Some lenders offer loans across a range of credit scores, but approval and rates depend on individual assessments. Borrowers with excellent scores (800+) receive rates around 9.79% p.a., while those with poor credit (below 460) may face rates around 25.25% p.a.
The average personal loan term is 35.4 months (just under 3 years), though terms can range from 12 months to 7 years depending on the lender and loan amount.
Yes, total personal loan borrowing has reached all-time highs at $2.5 billion monthly, with steady growth since April 2020. This reflects both increased borrowing needs and improved economic conditions compared to the early pandemic period.
Source: money.com.au | Personal Loan Statistics
Personal loan statistics provide valuable context for understanding Australia's lending landscape, but your individual circumstances will ultimately determine the ideal borrowing approach for your needs. These insights reveal that personal loans serve diverse purposes across different age groups and income levels, with borrowing patterns reflecting broader economic conditions.
Whether you're considering a personal loan for debt consolidation, a major purchase, or unexpected expenses, use these statistics as a starting point for comparing your situation against national trends. Remember that factors like your credit score, income, and chosen loan term will significantly impact the rates and terms available to you.
The key to successful personal loan management lies in understanding both the market conditions and your own financial capacity, ensuring that any borrowing decision supports your long-term financial wellbeing.
Disclaimer: This information is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether it is appropriate for your circumstances before acting.