Will my credit score impact my loan application

Will my credit score impact my loan application?

As we’ve said before, individuals don’t have one universal credit rating. However, your loan provider will use their own scoring system to predict how likely you are to be a good customer.

As every lender has their own scoring system, there’s no real way to know why you may be deemed a good applicant by one lender, or why you may pose more of a risk to another.

Even though the credit score you see online might be good, your current circumstances might not always be a suitable fit for all finance products.

The best example here is low-rate APR loans. More applicants typically get declined for this type of product. Lenders will only offer the very best rates to customers with the lowest level of risk, as these customers are most likely to be able to pay the loan off reliably. As only a small percentage of customers will be offered the best rate for this product, accept rates may be lower and other higher rates may be offered to customers who don’t meet the stringent scoring criteria.

Yes, it’s correct that providers must offer the Representative APR to at least 51% of customers, but it’s worth keeping in mind that this only applies to 51% of accepted applicants.

It may be more likely a larger percentage of customers will be accepted for credit products such as credit cards or high-APR loans, for example. This is because lenders allow more people to access credit, but this can be costly for the customer and you could end up paying higher interest rates.


*Disclaimer & Example: For our Small Loans of $2,000 or less, an APR (Annual Percentage Rate) doesn't apply. These loans are fee-based only with a term between 62 and 180 days, and so the APR is 0%. The establishment fee is 20% of the amount borrowed and the monthly fee is 4% of the amount borrowed. Representative example: a loan of $1,000 repaid over 3 months equates to a total amount payable of $1,320 comprised of $1,000 principal (amount borrowed), $200 establishment fee and $120 in monthly fees. The maximum comparison rate on loans between $300 and $2000 is 199.43%.
For our Medium Loans between $2,100 and $5,000, with a term between 2 months and 12 months, the maximum Annual Percentage Rate (APR) is 48% (Comparison rate 65.6597% p.a.) and there is a $400 Establishment Fee. A Medium Loan of $3,000 borrowed over 1 year would equate to a total amount payable of $4,289 (including a $400 establishment fee).

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR %). The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

© 2023 Owned by Australian Synergy Finance Pty Ltd, ABN 54 613 655 646. Australian Credit Licence 490422. The information on this webpage is general information only and does not take into account your objectives, financial situation or needs.