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Seb M.
Seb M.
Williamstown, VIC

Is it possible to use the funds from a personal loan as the deposit to get a home loan?

5 years ago


Potentially, it all depends on your lender's definition of true savings. It's unlikely, however my team are able to explore all options for your situation if you would like to?



Hi Seb,
It is possible, it would depend on why you wanted to use a personal loan.
If that is your only savings, then it would not be acceptable. If you have genuine savings in another facility such as term deposits, managed funds or equity in another property, but don't wish to use that or can't access it in time then it may work.
If you would like to meet and discuss your options you can click on my profile
Best regards

It is possible, but there are a number of issues that you would have to resolve particularly if the lending is above 80% loan to value ratio.

Hi Seb,

It's not something I'd recommend. Most, if not all lenders would not accept a personal loan as a deposit.

You also have to consider what impact this would have on your servicability/capacity to repay. Eg. If you personal loan repayments are say $500 per month, your total borrowings could be reduced by as much as $70K or more.

Judging by your current and previous queries, it would appear that you're pretty keen to get into the property market. Please feel free to get in touch, helping people get into the property market is one of the main reasons I'm in this game.

All the best,

Dear Seb,
The simple answer is YES. You can use the personal loan funds as a deposit. You will need to find a lender/broker that can find you the right product as, like many before have mentioned, many lenders may not like the borrowed funds however, there are many lenders that will accept the borrowed funds as a deposit.
If you get stuck, I can point you in the right direction - no obligation.

Good luck Seb :-)

Graham Doessel

5 years ago

Thanks for the feedback. I am very keen to get into the property market and was hoping a personal loan of $20,000 could help with the deposit as I have only saved $6,000.




Hi Seb,
On the surface, the personal loan won't actually help you to get the house. As a couple of the guys said, a personal loan has to be paid off in a short period of time and would cost you more per month and higher interest.
If you qualify as a first home buyer and can save more over the next 3 months, then you could be able to afford to purchase with the FHOG and stamp duty exemption from July 1st.
There are lenders who will go to 97% or 98% loan to valuation.
Sit with a broker now so that they can give you an individual assessment and help you work on the best ways to qualify

I hope all of the answers have helped Seb. If you get stuck, reach out to the person that you feel comfortable with and, by now, you should start to be getting some clearer direction.
Good luck Seb.
Call me on 1300 667 218 when you want further clarity.

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