Best Alternatives to Personal Loans in Australia

Sometimes, a traditional personal loan may not suit your financial situation. You might not meet standard lending criteria, need more flexibility than a lump-sum loan provides, or want a solution tailored to a specific purpose.

Fortunately, Australians have access to a wide range of alternatives to personal loans, including credit cards, lines of credit, home equity options, buy now pay later services, and alternative lenders. Each option works differently and comes with its own costs, risks, and trade-offs.

In this guide, you’ll learn about common alternatives to personal loans in Australia, who they may suit, and how to think about choosing an option that aligns with your needs and financial position. We’ll also explain where Credit24 fits for borrowers who prefer a simple and transparent loan structure.

Apply now

Why consider an alternative to personal loans?

People look for alternatives to personal loans for many reasons, including:

• Difficulty meeting bank credit requirements
• A need for flexible or ongoing access to funds
• Wanting to avoid unsecured lump-sum debt
• Only needing part of the total amount upfront
• Situations requiring specialised financing
• Using existing assets to support borrowing
• Wanting different timing or access to funds than a standard personal loan provides

Alternative lenders and credit products often assess applications differently. Some options may be lower cost over time, while others trade cost for flexibility or convenience. Understanding these differences helps support better financial decisions.

Best alternatives to personal loans in Australia

Below is an overview of commonly used alternatives, how they work, and what to consider before choosing one.

1. Credit cards

Best for:

• Ongoing or unpredictable expenses
• Short-term borrowing that can be repaid quickly
• People wanting flexibility rather than a lump sum

How it works:
A credit card provides a revolving credit limit. You borrow up to the limit, repay some or all of the balance, and reuse the available credit. Interest is charged only on the amount used.

Pros:

• Flexible access to funds
• Interest-free periods (often 45–55 days)
• Rewards or purchase protections on some cards

Cons:

• High interest if balances aren’t repaid
• Easy to overspend
• High utilisation can affect your credit profile

2. Home equity loans

Best for:

• Homeowners with available equity
• Larger borrowing needs
• Borrowers seeking lower interest rates

How it works:
You borrow a lump sum secured against your property and repay it over a fixed term.

Pros:

• Lower interest rates compared to unsecured credit
• Larger loan amounts
• Longer repayment terms

Cons:

• Property is at risk if repayments aren’t met
• Slower approval process
• Valuation and legal costs

3. Home equity line of credit (HELOC)

Best for:

• Homeowners needing funds over time
• Renovations or ongoing expenses

How it works:
A secured line of credit allows you to draw funds as needed, paying interest only on what you use.

Pros:

• Flexible access
• Lower rates than unsecured credit
• Interest charged only on drawn amounts

Cons:

• Variable interest rates
• Risk to your home
• Potential to overborrow

4. Buy Now, Pay Later (BNPL) services

Best for:

• Smaller purchases
• Short-term repayment needs

How it works:
Purchases are split into instalments, usually over weeks or months, often with no interest if paid on time.

Pros:

• No interest if repayments are met
• Quick setup
• Often no traditional credit checks

Cons:

• Late fees can add up
• Easy to overcommit across multiple providers
• Limited to participating retailers

5. Credit card balance transfers

Best for:

• Consolidating credit card debt
• Borrowers who can repay during the promo period

How it works:
Existing card balances are transferred to a new card with a temporary low or 0% interest rate.

Pros:

• Potential interest savings
• Simplifies multiple debts
• Can help accelerate repayment

Cons:

• Balance transfer fees
• Higher interest after the promo period
• Requires discipline

6. Personal line of credit

Best for:

• Ongoing or irregular expenses
• Borrowers seeking flexibility

How it works:
An unsecured revolving credit facility where interest is charged only on used funds.

Pros:

• Flexible borrowing
• Lower rates than many credit cards

Cons:

• Variable rates
• Limited availability in Australia
• Lower limits than secured options

7. Peer-to-peer (P2P) lending

Best for:

• Borrowers declined by traditional banks
• Online-focused applicants

How it works:
Loans are funded by individual investors through a platform.

Pros:

• More flexible assessment criteria
• Transparent pricing structures

Cons:

• Origination fees
• Rates vary widely
• Less established than banks

8. Secured personal loans

Best for:

• Borrowers with assets
• Those seeking lower rates

How it works:
An asset such as a car or savings account is used as collateral.

Pros:

• Lower interest rates
• Higher approval likelihood

Cons:

• Risk of losing the asset
• Less flexibility

9. Car loans

Best for:

• Vehicle purchases

How it works:
The vehicle secures the loan, with repayments made over time.

Pros:

• Lower rates than unsecured loans
• Purpose-built for vehicles

Cons:

• Vehicle can be repossessed
• Depreciation risk

10. Guarantor loans

Best for:

• First-time borrowers
• Limited credit history

How it works:
A guarantor agrees to cover repayments if the borrower cannot.

Pros:

• Improved approval chances
• Potentially lower rates

Cons:

• Financial risk for the guarantor
• Can affect personal relationships

11. Cash advance and earned wage access apps

Best for:

• Small, short-term cash needs

How it works:
Access to wages already earned before payday.

Pros:

• Fast access
• Lower cost than payday loans

Cons:

• Reduces future pay
• Limited amounts

12. Early access to superannuation

Best for:

• Severe financial hardship
• Compassionate grounds

How it works:
Access is only available under strict conditions through the ATO or your super fund.

Pros:

• No interest or repayments

Cons:

• Reduces retirement savings
• Strict eligibility
• Last-resort option

Frequently Asked Questions

What is the best alternative to a personal loan?
It depends on your needs, financial position, and timeframe. Each option suits different situations.

Can I access alternatives with bad credit?
Some options assess more than just credit score, such as secured or guarantor loans.

Are alternative lenders safe?
They can be, provided they hold an Australian Credit Licence and follow responsible lending obligations.

How quickly can funds be accessed?
This varies by product, from near-instant to several weeks.

Will alternatives affect my credit score?
Some products do, while others may not unless repayments are missed.

Why choose Credit24

After comparing alternatives, some borrowers still prefer the clarity and structure of a personal loan.

Credit24 offers:

• Fully online application
• Loan amounts from $500 to $10,000
• Clear repayment schedules
• Fixed loan terms
• No collateral required
• Transparent pricing

Funds may be paid to eligible accounts using OSKO, depending on your bank.

This information is general only and does not consider your personal financial situation. Credit is subject to eligibility criteria, fees, and terms and conditions.

Apply now

Disclaimer

IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839.

The information in this article is general in nature and does not consider your objectives, financial situation, or needs. Lending criteria, fees, and charges apply. For product details, eligibility requirements, and full terms and conditions, visit www.credit24.com.au.