Friendly Finance is an Australian loan marketplace that connects borrowers with lenders from its panel for loans of up to $15,000. If you're looking for a loan of up to $5,000, though, it's important to understand how the platform works and how much their small and medium loans cost before you move ahead with your application.
How do Friendly Finance's loans work?
Friendly Finance is a broker, not a direct lender. When you apply, it matches you with a lender from its panel based on your situation, and that lender makes the final call on your application. If you’re borrowing $5,000 or less, there are two loan types available:
- Small loans: borrowing between $300 and $2,000 puts you in the small loan category. Loan terms generally range from 16 days to 12 months, though your matched lender will confirm the exact terms available to you.
- Medium loans: you can borrow between $2,001 and $5,000 with a medium loan through Friendly Finance. Like small loans, the terms on offer depend on your lender, but they’re typically available for anywhere between 16 days and two years.
Once you’re matched with a lender and happy with the offer, you sign your contract electronically and funds are transferred directly to your bank account, in some cases on the same day.
How much do Friendly Finance loans cost?
The fees differ between the two loan types and can also vary between lenders, so it pays to know what applies to the amount you want to borrow before you sign your contract. Here are the fee and interest caps for each loan:
Small loans ($300 to $2,000)
- Establishment fee: up to 20% of the loan amount
- Monthly fee: up to 4% of the loan amount
Medium loans ($2,001 to $5,000)
- Establishment fee: up to $400
- Interest rate: up to 48.00% p.a.
Let’s take a look at a couple of examples to see how much your loan might cost in practice:
| Small loan example | Medium loan example | |
|---|---|---|
| Loan amount | $1,000 | $4,000 |
| Term | 6 months | 18 months |
| Establishment fee | $200 | $400 |
| Interest/monthly fees | $240 | $1,790 |
| Total repayable | $1,440 | $6,190 |
| Fortnightly repayment | $111 | $159 |
| Calculations are for illustrative purposes only. Medium loan example based on an interest rate of 48.00% p.a. Your actual rate and costs will depend on your personal circumstances and the lender you’re matched with. | ||
Am I eligible for a Friendly Finance loan?
To qualify for a loan through Friendly Finance, you’ll generally need to meet the following requirements:
- You must be an Australian citizen or permanent resident
- You must be at least 18 years old
- You must have been earning a regular income for at least three months before applying
- You must be able to supply your three most recent months of bank statements
- If you receive Centrelink payments, these must account for no more than 50% of your total monthly income
Can I apply with bad credit?
Yes, Friendly Finance works with lenders who consider applicants with less-than-perfect credit histories. Having bad credit doesn’t automatically rule you out, though approval isn’t guaranteed.
What are the alternatives to a small loan with Friendly Finance?
If you’re looking to borrow $500 to $5,000, another option you have is to apply through Savvy. We’ll run your application past our panel of lending partners and connect you with a lender whose criteria you meet. This helps make the process straightforward from the start. All applications remain subject to lender approval, though.
If you’re on a low income and need to buy household essentials or cover necessary bills, a No Interest Loan (NIL) may be worth considering. Good Shepherd runs this program, allowing eligible applicants to borrow up to $3,000 for essentials like furniture, rental bonds and whitegoods or up to $5,000 for a car. These loans come without fees, interest or credit checks (up to $3,000), and funds are paid directly to the supplier.
