Frequently Asked Questions

Hobart Loans is an independent personal and business finance publication based in Hobart, Tasmania. We publish plain-English guides on loans, credit and business finance, and offer a free loan-readiness review that helps people understand their options, organise documents and prepare before they apply. You can read more on our About us page.

No. Hobart Loans is not a lender and does not hold an Australian Credit Licence, so we do not lend money, arrange loans, recommend specific credit products or provide credit assistance. Where a reader wants to apply for credit, we may refer them to an Australian Credit Licence holder, such as a broker or lender, who can assess their situation.

Yes. There is no charge to you for a loan-readiness review or for reading anything on the site. The review is about helping you understand where you stand, which documents lenders typically ask for and what questions to raise, so you go into any application better prepared. See our services page for what each review covers.

We fund the site through advertising and sponsorship, and in some cases through referral fees paid by a licensed broker or lender when we refer a reader to them. We aim to clearly label advertising and sponsored content. Any referral fee is disclosed to you before a referral is made, so you can decide whether to go ahead.

Yes. Before we refer you to any broker or lender, we tell you who the referral is to and whether we will receive a fee for it. You are free to decline the referral or to approach any other lender or broker yourself.

No. Using our guides, calculators or a loan-readiness review does not commit you to applying for a loan, accepting a referral or dealing with anyone we mention. You can stop at any time.

No. Our content and reviews are general information and education only and do not take into account your objectives, financial situation or needs. For advice about your circumstances, speak to a licensed professional such as a credit licensee, financial adviser, accountant or solicitor. Our disclaimer sets this out in full.

Our articles are written and edited by Philip Riddle, Editor of Hobart Loans. We draw on official sources such as ASIC's Moneysmart, the ATO and APRA, and we avoid quoting rates or scheme limits that change frequently. Instead we use clearly labelled illustrative examples and point you to the authoritative source to check current figures.

A secured loan is backed by an asset, such as a car or property, that the lender can sell if you do not repay. An unsecured loan has no specific asset behind it, so lenders usually charge higher rates and lend smaller amounts. Our personal loan comparison guide covers both.

The comparison rate combines the interest rate with most upfront and ongoing fees, so it gives a fairer picture of cost than the headline rate alone. It is calculated on a standard loan amount and term, so it will not exactly match your loan, and it leaves out some costs such as government charges and break costs. Use it to shortlist, then read the fee schedule.

A fixed rate gives certainty over repayments for a set period but often limits extra repayments and can involve break costs if you exit early. A variable rate can rise or fall and usually offers more flexibility, such as offset and redraw. Many borrowers split their loan between the two; the right mix depends on your budget and how much flexibility you need.

A longer term lowers each repayment but increases the total interest. Example: an illustrative $30,000 loan at 9% p.a. costs about $953.99 a month over three years (about $4,344 in total interest) or about $622.75 a month over five years (about $7,365 in interest). Read Long-term loans explained or try your own numbers in the loan calculator.

Common fees include establishment or application fees, ongoing monthly or annual fees, late payment fees, discharge fees and, on fixed-rate loans, break costs. Business and asset finance may also carry documentation or brokerage fees. Ask for the full fee schedule in writing and check the key facts sheet or credit guide before you sign.

Usually, yes. Most variable-rate loans allow extra repayments without penalty, which reduces the interest you pay. Fixed-rate loans often cap extra repayments and may charge a break cost if you repay in full during the fixed period, so check your contract or ask your lender first.

It depends on the lender, the property and your circumstances. Many lenders will lend with a deposit below 20%, but lenders mortgage insurance (LMI) typically applies when the loan-to-value ratio is above 80%. Government schemes may help eligible buyers, but their rules and caps change, so check current details on official government websites before relying on them.

The loan-to-value ratio (LVR) is the loan amount as a percentage of the lender's valuation of the property. For example, a $400,000 loan on a $500,000 property is an 80% LVR. LVR affects whether you pay LMI, the interest rate you may be offered and how much you can borrow.

An offset account is a separate transaction account whose balance reduces the amount of the loan that interest is charged on, while your money stays in your account. Redraw lets you take back extra repayments you have already made into the loan itself. Both can reduce interest, but access rules and fees differ; see the glossary for more detail.

No. Pre-approval, or conditional approval, is an indication of how much a lender may lend you, subject to conditions such as a satisfactory valuation and verification of your details. It expires after a period and can be withdrawn if your circumstances change. Avoid taking on new debts between pre-approval and settlement.

A bridging loan covers the period when you own both your existing and your new property. The lender assesses your peak debt while you hold both, and your end debt once the existing home sells. Read Bridging loans: how to buy your next home before you sell and our bridging finance guidance for the details.

Refinancing may be worth considering if you could get a meaningfully lower rate, better features or need to restructure your debts. Compare the potential savings with the costs, including discharge fees, establishment fees, break costs on fixed loans and possibly LMI. Our home loan readiness review can help you organise the questions to ask.

Common options include term loans, overdrafts, lines of credit, invoice finance, and asset finance such as chattel mortgages, hire purchase and finance leases. Each suits a different need, from buying equipment to smoothing seasonal cash flow. Our guide to types of business finance in Australia compares them.

Lenders commonly ask for your ABN details, recent BAS statements, business bank statements, financial statements or tax returns, details of existing debts and, for larger loans, a business plan or cash flow forecast. Requirements vary by lender and loan size. Our business loan matching page includes a preparation checklist.

Borrowing can make sense when the expected return from the investment comfortably exceeds the full cost of the finance and the business can still meet repayments if results are slower than planned. Stress-test your figures with a conservative scenario before committing. Our article Should you borrow to grow? sets out a simple framework.

With a chattel mortgage, your business owns the asset from the start and the lender takes security over it. With a finance lease, the financier owns the asset and your business pays rentals, often with a residual value at the end. The GST and tax treatment differs, so check with your accountant or the ATO.

Many small business lenders ask directors or owners for a personal guarantee, which makes you personally liable if the business cannot repay. In some cases, lenders may also take security over personal assets such as your home. Read any guarantee carefully and get independent legal advice before signing.

Generally not in the same way. Loans made wholly or predominantly for business purposes usually fall outside the National Credit Code, so protections such as responsible lending obligations and statutory hardship rights may not apply. You may still be able to complain to AFCA about a financial firm, and banks that subscribe to industry codes may have additional obligations.

You can request your credit report from each of Australia's main credit reporting bodies, Equifax, Experian and illion, and you are entitled to a free copy from each at regular intervals. Because they may hold different information, it is worth checking all three. Moneysmart explains how to request your report.

No. Checking your own credit report or score does not count as a credit application and does not lower your score. Applications for credit are recorded as enquiries, and several in a short period can concern lenders.

Lenders look at your capacity to repay, your credit history, your deposit or capital, any security, and the loan conditions and purpose. They also verify income and expenses and apply a serviceability buffer. Our article How lenders assess your loan application explains the 5 Cs and includes a 30-day preparation plan.

Pay all bills and repayments on time, reduce or close unused credit card limits, avoid multiple credit applications close together, and keep your bank statements tidy for a few months before applying. Correct any errors on your credit report and have your documents ready. A free loan-readiness review can help you get organised.

Ask the lender why, and check whether information from a credit report contributed to the decision. Get a copy of your credit report and fix any errors before applying elsewhere, because a string of new applications can make things harder. Focus on the underlying issue, such as high debts or limited savings, before trying again.

Contact your lender as early as possible and ask about a hardship variation, such as reduced repayments or a short pause. Free, confidential help is available from financial counsellors through the National Debt Helpline. If you cannot resolve a dispute with your lender, you may be able to complain to AFCA.

The loan calculator uses the standard amortisation formula to estimate repayments and total interest based on the figures you enter. Results are estimates only: they do not include every fee, rate change or lender policy, and they are not a quote or an indication that you will be approved. Check actual costs with the lender.

You can review and change your choices at any time through the cookie settings link on the site, and you can also block or delete cookies in your browser settings. Our cookie policy explains which cookies we use and why.

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We use the information you provide to respond to your enquiry or deliver the service you asked for, and we only share it with a broker or lender if you agree to a referral. Please do not send sensitive documents such as full bank statements or identity documents by email unless we specifically ask. Our privacy policy explains how we collect, use and protect personal information.

Email us at [email protected] or visit our contact page. We are based in Hobart, Tasmania.

Please email [email protected] with the page address and what you think needs correcting. We review reported errors and update content where needed. Rules and rates change, so always confirm important details with the official source before acting.