6 Mistakes People Make When Getting A Personal Loan

Avoid these 6 mistakes when getting your next personal loan and you could save a lot of money.

The nmoni difference:

6 Mistakes People Make When Getting A Personal Loan

We’ve helped thousands of people get a personal loan that saves them serious money.

Often we help people who have made a mistake while searching for a personal loan. It’s not their fault – they just didn’t know all the ins and outs of lending in Australia.

We thought we would share these mistakes with you in the hope you won’t make them!

Here are the 6 mistakes people make when looking for a personal loan. Work with us and we’ll help you avoid them!

Mistake #1: Not checking your credit score

Your credit score can play a major role in not only deciding if you can get a loan, but what rate you might qualify for.

It’s definitely worthwhile to check out your current credit score and look for ways to improve it. It’s free and really easy to do and an online loan service like us can also help. For further information on how to get your credit score read some of our great articles like “What is a credit score?” and “How do I improve my credit score?”.

Mistake #2: Applying for a loan with too many lenders

We see this problem often. In the search for a great deal people apply for a personal loan with many lenders.

This is a problem for two reasons.

Firstly, applying for too many personal loans can impact your credit rating. This is because an application direct to a lender will often trigger what’s called a hard credit check.

Hard credit checks are a formal credit inquiry and therefore impact your credit score.

If you apply for a loan with lots of lenders, you run the risk of seriously hurting your credit rating.

Secondly, different lenders have different lending policies.

For example, some lenders insist on a minimum time in your job before they give you a loan, some only lend to people who own a home while other lenders don’t do loans for cosmetic surgery or legal fees.

If you don’t know these lender policies you may get rejected for a loan at a lender and not really understand why. That can be very frustrating. 

That’s why it’s important to use an online loan service. An online loan service can quickly scan the market and find a great deal for your situation – all without hurting your credit score.

When looking for an online loan service make sure they cover these five points:

  1. Make sure they have at least 20 lenders to choose from. It’s important they provide alternatives for you to choose from so they need a large panel of lenders.
  2. Excellent customer reviews. You want an online loan service that will work in your best interests. Find a broker with lots of 5-star reviews. Read the reviews to get a sense of the business they run.
  3. An easy online process. With the internet and digital technology applying for a loan should be fast and hassle free. Make sure they have quick and simple online forms that can be completed in under 10 minutes.
  4. No upfront credit checks. As mentioned above, this is really important. Make sure your online loan service does what’s called a ‘soft’ credit check which doesn’t hurt your credit score.  
  5. A great knowledge of lender policies so they only place you with a lender that suits your situation.


At nmoni we have over 35 lenders to choose from, are rated 4.9 on Google from 500+ reviews, have a fast and simple digital application form and we don’t do upfront credit checks to protect your credit score.

We also have a deep understanding of lender policies so we can place you with a lender that suits your circumstances and avoid hurting your credit score.

So, apply now and sit back and relax while we do all the work!

Mistake #3: Not shopping around

In mistake number 2 we outlined some of the problems people run into when applying for a loan with lots of lenders. Although these can be significant problems, it can be just as painful if you just take the first loan you are offered. The Australian lending market is really competitive, so we always encourage people to shop around and look for the best loan for their circumstances.

Definitely be careful of all the things we listed in mistake number 2, but shopping around can save you serious money.

Of course, we can make the process of shopping around really easy because we can match your situation to a lender that suits you and avoid hurting your credit score. And we can save you serious money while we find you a personal loan that works for you.

Mistake #4: Not understanding all the fees and charges

Many lenders charge all sorts of different fees like set up fees, orgination fees and monthly fees.

While it’s important to ensure you are getting a great rate you also need to be mindful of these other costs of the loan.

When assessing which loan is best for you make sure you add up all the interest charges and fees right through the period of the loan. This will give you a much better indication of which loan is better for you.

We can of course help you with this because we lay out all of these fees for our clients so that everything is transparent and there are no nasty hidden surprises. It’s just one of the advantages of using nmoni.

Mistake #5: Getting a Payday or Short term loan

Sometimes we see clients who needed cash quickly so they applied for a payday loan, small amount loan or short term loan.

While these loans feel like a quick fix there are many problems.

For example, they often have very high fees. Some charge 20% of the amount borrowed and a monthly fee of 4% per month. They also have high default fees. These types of loans can also affect your credit score. Finally, some lenders won’t lend you money if you have too many of these types of loans.

If you are considering a payday loan think it through really carefully and make sure you are aware of all costs, terms and conditions so you don’t end up with some nasty surprises.

Mistake #6: Not making sure they can make extra repayments

You may find yourself in the position of being able to pay off your loan sooner because you have saved money or got a pay increase. Make sure the loan you get allows you to pay it off faster so you can reduce the interest you have to pay. Being able to pay off your loan sooner is really important as it improves your credit score and allows you to do other things with your money.

So, there you have the 6 mistakes people make when getting a personal loan.

Focus on avoiding these mistakes and you’ll go a long way to getting a great deal on a personal loan.

If you’d like us to help find you a personal or car loan from our large panel of lenders fill in our application form now. It takes less than 10 minutes!

Frequently Asked Questions

Follow the two-step process we describe here. Firstly, ensure you understand your credit score and think about how you can improve it. Secondly, shop around using an online loan service like us. Finally, make sure you are aware of all the fees and charges associated with the loan (we fully disclose all lender fees and charges so there are no hidden surprises).

Secured Personal Loans

A secured personal loan is secured by an asset like a car or a boat. Secured personal loans typically have lower interest rates because they are less risky for the lender. Taking a secured personal loan may also allow you to borrow more money depending on your situation.


One thing to be mindful of is that if you default on your secured personal loan the lender may repossess the asset you put up for security.


Unsecured Personal Loans

This is the opposite of a secured loan in that you don’t have to put up an asset as collateral. Generally these loans have higher interest rates because there is more risk for the lender. The upside is that you don’t run the risk of losing your asset if you default.


Debt Consolidation Loans

Debt consolidation loans are where you take one loan out to pay off your existing debts (multiple loans). If you get the right help, you can sometimes get a lower interest rate and fees than your credit cards or other loans. This means you’ll save money on interest and can hopefully pay off your loan faster. The other really big benefit is that you end up with one single monthly repayment rather than multiple repayments on different loans. This just makes it easier to manage.

Lenders focus on risk – that is the risk that you may not repay the loan. Lenders do assess people differently, which is why it’s important to shop around, but there are some general factors that most lenders look at:

  1. Your credit history. Lenders review your credit score and credit history to assess your ability to repay the personal loan.
  2. The amount of money you need. Lenders look at how much you want and your ability to repay (or service) the loan (what your income and expenses are). If you have excess funds after your expenses you may represent a lower risk.
  3. The term of the loan. If you need longer to pay off a loan it may be a sign you aren’t in a strong financial position.

A personal loan is a sum of money a lender gives you that you repay over an agreed period of time plus interest and other fees and charges.

Personal loans generally range from $5,000 - $80,000 and the term of the loan ranges from 1 to 7 years (5 years is pretty common).

Low interest rate personal loans are used for things like buying a car, boat or caravan, traveling, consolidating debt, cosmetic surgery or paying legal fees. Home renovations are another really common reason for people taking a personal loan.

The interest rate on a personal loan is really important but sometimes it doesn’t tell the full story about how competitive a loan really is. That’s because there may be significant fees and charges associated with a loan.


To help people compare personal loans the concept of a comparison rate was born. The comparison rate includes the interest rate PLUS all the other costs that come with the loan.


For example, lets say a lender is offering an interest rate of 3.99%. Sounds pretty good? The comparison rate for this loan may actually be 6.99% because there are set-up fees and monthly fees that significantly increase the costs associated with the loan. So make sure you take a look at the comparison rate of a personal loan so you get a feeling of the other costs involved.

Before you commit to a personal loan make sure you check to see if there are some important features like:

  1. Extra repayments: You want to be able to pay extra off your loan if you starting earning more money (or win the lottery!). This is an important feature as paying off your loan sooner can save a lot of money in interest.
  2. Redraw: If you get a personal loan with a redraw facility you’ll be able to withdraw the extra money you have paid off. This can save a lot of money because often the interest you’ll save on your loan will be more than the interest you’ll get by leaving your money in a savings account.

Importantly, make sure you understand if a lender charges extra fees for these types of features (or actually using these features).

Personal loans generally range from 1- 7 years with 5 years being common. If you make sure you have the ability to make extra repayments you’ll have the option to pay off your loan much quicker and potentially save a lot of money.

This is where our deep knowledge of lender policies can really help. There are some lenders who will borrow to people who receive Centrelink payments but it can depend on the amount received and what percentage of your total income these Centrelink payments represent. It’s best to apply for a loan through us and we will take a look at your situation to see if we can help.

We have had personal loans approved in under 30 minutes when clients fully complete our fast online application. You can have the funds within 24 hours in some circumstances. Apply here to get started.

Payday loans (short term loans) tend to be for smaller amounts ($100 - $5,000 but generally under $2,000) and taken out for 14 days to 1 year. They often have very high fees (some charge 20% + 4% per month) with significant early exit costs. Personal loans are generally taken out over 1 – 7 years and loan amounts between $5,000 - $80,000. Personal loans can have fees associated with them but they can vary considerably by lender.

Absolutely and this can sometimes be a very clever strategy depending on your personal situation. This is commonly called debt consolidation and it’s where you take one loan out to pay off your existing debts (multiple loans). If you get the right help, you can sometimes get a lower interest rate and fees than your credit cards or other loans. This means you’ll save money on interest and can hopefully pay off your loan faster. The other really big benefit is that you end up with one single monthly repayment rather than multiple repayments on different loans. This just makes it easier to manage.

A credit score is a number generated by credit reporting agencies that provides an indication of your credit worthiness. A credit score is really important as they can significantly affect your ability to get a loan and how much that loan will cost (the interest rate and other charges).

For more information on credit scores read our article "What is a credit score".

The exact formula is not disclosed by credit reporting agencies however there are several key factors that they consider like the amount of money you’ve borrowed, the number of loan applications you have made, your repayment history and any defaults, bankruptcies, debt collection agency agreements or short-term credit you have.

For more information on credit scores read our article "What is a credit score".

Yes, your credit score can affect the rate you are offered and how much you can borrow on a personal loan.


Typically if you have a really good credit score you’ll be able to get a low interest rate and have more lenders willing to borrow money to you.


But don’t despair if you don’t have a perfect credit score. There are a number of other factors that impact your ability to get a loan like whether you own a property or asset to provide security or not. That’s why it’s best to work with us as we know the lending policies of all the lenders on our panel which gives us the best chance of finding a loan that suits your circumstances. 


For further information on credit scores read some of our great articles like “What is a credit score?” and “How do I improve my credit score?”.

Through us! We have state of the art technology and an Australian based team that will quickly present you loan options from our large panel of lenders. We have a 4.9 Google rating from over 500 reviews so we think we can look after you! Apply here.

At nmoni we do not perform upfront credit checks. This means that we can review your application and give you a guide as to whether a lender will give you a loan before a credit check is completed. Our process reduces the number of credit checks required and therefore helps you avoid hurting your credit score. Start the process today by completing our fast application.

This is really important as you don’t want to get a loan with a lender that charges high fees and has high exit costs. We only deal with reputable lenders so we can ensure you avoid any of these potential potholes. Also, make sure the lender or broker you use has high Google ratings (we happen to have a 4.9 out of 5 Google rating!).

Secured loans are amongst the easiest loans to get. That's where you put up something of value in exchange for funding. Car, boat and caravan loans are types of secured loans and means the lender has some security over the loan.

We can review your situation and provide feedback on why you are being declined without hurting your credit score. Apply now and we'll provide you valuable feedback.

real customer reviews

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4.9 Google rating
based on 700+ reviews

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After searching for a car loan I found nmoni. They are very helpful… keep you up to date at the progress of your loan. And made settlement a breeze. Thank you Chris and Michelle you are both amazing.

Jodie Bayliss

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Outstanding service. Above and beyond and service you just can’t get from a big bank or finance company.The team at nmoni have been incredibly helpful in assisting me with obtaining business finance for my new vehicle. Every step of the process they have been super responsive and highly efficient. I would highly recommend their service!

Ben Duncan

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I just want to say thank you to Chris from NMONI for helping me get my car finance.

Highly recommended bunch! As they go above and beyond to help you achieve the best possible outcome. They are very prompt with communicating and provide excellent customer service.

Kevin Reyes

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Omg with my credit rating I thought I’d never get credit again but these guys gave me the chance and now my credit rating is rising these guys work magic

Josh Carson

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Nmoni is such a great lending company, Christina is the best of best broker, person and very understanding. Great customer service and very helpful any time, she actually answers the phone unlike other company employers who do not care. She Actually cares and Christina does everything in her power to help and solve your issues. Thank you Nmoni and thank you Christina.

Mirjana Markovic

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