Can a Personal Loan Affect Your Credit Score?

There might be several reasons for taking a personal loan – an upcoming holiday, an unexpected expense, or something else. But if you are wondering “Does a personal loan affect your credit score?”, then you must read this blog.

What is a Personal Loan?

A personal loan allows you to make big purchases or cover unexpected expenses. Reasons can be any for taking a personal loan. If you are looking for personal loan brokers to take a personal loan, you should look no further than Star Home loans. You may be taking a personal loan for:

  • consolidating debt
  • making big purchases, such as organising a wedding, buying a car, medical, holiday, etc.
  • to cover unexpected expenses.

When you decide to take a personal loan, you can be overwhelmed by a number of options out there. It can be difficult to choose the right loan for you, that’s why you should seek help from professional brokers like Star Homeloans in Australia. Here are some crucial factors to consider when comparing loans:

  • interest rate
  • repayment terms
  • borrowing limits
  • fees

Does a Personal Loan Affect Your Credit Score?

When you apply for a personal loan, it can impact your credit score. The loan term, amount, and purpose of the loan are all factors responsible for affecting your credit score. When a lender requests your permission to access your credit file, it could negatively affect your credit score as it gets marked on your credit history. Each time you apply for a loan, the lender reports it to the credit bureau, and it can affect your credit score if you are applying for loans more frequently, especially after a previous application has been rejected.

However, if you use a personal loan for debt consolidation or reduce your overall debt burden, then it can help improve your credit score in the long run. While applying for a personal loan for this reason will still leave a mark on your credit file.

Tips for Managing a Personal Loan

Here are a few things you can do to improve your credit score and simplify your loan approval.

  • Compare Personal Loans

Before you apply for a personal loan, make sure to compare different loan products to make sure you are applying for fewer products, as a result, it will limit the effect on your credit score. You can receive support from Star Homeloans to compare and choose the right loan product for you. We are the best mortgage broker Sydney, so even if you are looking for a home loan, you can ask us.

  • Calculate Your Repayments

Work out how much you can afford to borrow as it will help your credit score and avoid loan stress. You can also use our personal loan calculator to calculate your repayments before you apply so you know whether you can repay the amount or not. You can create a budget that will list your expenses and income and then use a calculator to know how much you can afford to make loan repayments each week, fortnight or month.

  • Make Repayments Consistently

After getting a loan approval, ensure to make repayments on time when they are due. In this way, you can pay off your personal loan faster. If you repay the loan, it could save you money in interest. If you can afford it, you can pay extra repayments each week, fortnight or month.

  • Seek Help from Star Homeloans

If you have poor credit score and you are looking to take a personal loan, then you can speak to us. We have years of experience in dealing with mortgage and home loans. We can help you find the right loan product that would match your financial requirements. Being the best mortgage broker Sydney, we have helped various clients in securing the right loan product.


If you are looking for the best personal loan brokers in Australia, then you can rely on Star Homeloans. We offer the best deals and offers on different loan products. You can get in touch with us to explore our personal loan and mortgage solutions.

Other Useful Link:

Personal loan Broker Sydney

Best Mortgage Broker Melbourne

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