Home Improvement

Personal Loans – The Do’s and Don’ts of Spending the Money


Personal Loans are one of the most popular and versatile loans in Australia. That’s why so many Aussies choose to take out Personal Loans each year. The greatest advantage of the Personal Loan is that it can be used for a variety of purposes, adding a high degree of flexibility and freedom.

Keep in mind though, that each lender has different criteria for approving Personal Loans and what the money can and cannot be used for. That’s what this article is going to be focusing on, but always check with your lender first to be absolutely certain what you can and can’t spend the borrowed funds on.

Another advantage when it comes to Personal Loans, Australia has so many lenders to choose from, so take your time to find the right lender for your needs and personal circumstances. In most instances, you can also apply for Personal Loans online and may even be able to get an instant Personal Loan from a private lender.

Let’s now take a look at what you can generally spend Personal Loan funds on and what’s frowned upon and not approved by most lenders.

Non-Approved Spending for Personal Loan Funds

Let’s start out with what you can’t spend Personal Loan money on, although this can vary a little from lender to lender. 

Put yourself in the position of the lender and try to determine whether a certain purchase or activity would be approved by you or not if you were lending someone money. For example, responsible lenders will not lend money for an illegal activity or gambling, which is understandable. For the most part, it’s really just common sense.

To be absolutely certain of the things you cannot spend Personal Loan money on, it’s vital that you check with your chosen lender first so there is no confusion.

What You Can Generally Spend Personal Loan Money On

This list can also vary, so once again be sure to confirm your primary purpose for the Personal Loan with your lender before applying for finance.

One of the most common reasons people take out a Personal Loan in Australia is to finance their wedding day. Weddings can be quite expensive, so most couples won’t have enough money saved to cover all of the costs of the big day. Taking out a Personal Loan means couples can then focus on planning and having their wedding without the added burden of financial stress.

Taking a holiday, either locally or abroad, is also one of the most common reasons why Aussies might decide to take out a smaller Personal Loan. We all need to get away from the stress of day to day life from time to time, but don’t always have the cash for that dream holiday. Borrowing the money, taking a break and unwinding refreshes the mind and body. Holidays are not just a luxury. Sometimes they are necessary to keep our sanity.

Doing home improvements and home renovations is near the top of the list of reasons why everyday people wish to take out Personal Loans. Home improvements also make sense from a financial viewpoint, as they will add value to the home. So, even though you’re acquiring a debt for the Personal Loan in the first instance, the funds are more of an investment rather than simply being a debt to repay.

Check with your lender for other options of Personal Loan spending.

The Wrap

There are definite do’s and don’ts when it comes to spending Personal Loan funds. Always get your idea approved by your lender first before filling out an application.

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