Private lenders
Private lending Australia: how it works in every state
Private lending Australia borrowers use is short-term finance from non-bank funds, family offices and private investors, secured mainly by property. Lenders focus on the security, the loan-to-value ratio and how the loan will be repaid, rather than relying only on payslips and credit scores. Costs are usually higher than a bank, and terms are shorter.
Written by Richard Goodwin, Founder and author, PrivetReviewed by Privet Team, Editorial review team, PrivetLast reviewed 23 October 2026
Who the private lenders Australia borrowers deal with are
Private lenders Australia borrowers meet range from large credit funds that raise money from wholesale investors, to smaller mortgage funds, family offices and individuals lending through a company. Most are non-bank private lenders: they are not authorised deposit-taking institutions, so APRA's bank lending rules do not apply to them in the same way.
Many lend for business or investment purposes only. Loans for personal, domestic or household purposes are generally covered by the National Credit Code and need an Australian credit licence. You can check a licence on the ASIC registers and learn how to check a lender.
Private lender vs bank: the main differences
The private lender vs bank choice usually comes down to timing and fit. If a bank will lend on terms that work, it is usually cheaper. Private finance tends to suit a gap: a settlement deadline, a property a bank will not take, or a borrower whose income is hard to show.
| Factor | Bank | Private lender |
|---|---|---|
| Main focus | Income, credit history and serviceability | Property security, LVR and exit plan |
| Typical term | Long term, often decades | Short term, often months to a few years |
| Cost | Lower interest and fees | Higher interest, plus establishment and other fees |
| Documents | Full financials and payslips | Can be lighter, but valuation and exit evidence matter |
| Decision speed | Can take weeks | Often faster, but depends on valuation and legal work |
| Flexibility | Strict policy rules | Case-by-case, including unusual property |
How a private loan usually runs, in four steps
Read how to read a term sheet and exit strategies before you sign anything.
- Enquiry and assessment: the lender reviews the property, the amount, the purpose and the exit.
- Indicative terms and valuation: you receive a term sheet and the lender orders a valuation.
- Formal offer and legal documents: loan and security documents are drafted and signed, usually with each side's lawyer.
- Settlement and exit: funds are advanced, then repaid by sale, refinance or other planned exit.
Asset-based lending and what lenders look at
Asset-based lending means the property, not your income alone, carries most of the decision. Lenders still check who you are, often check credit, and look closely at the exit. Expect questions about the valuation, existing mortgages, rates and land tax owing, and how the loan will be repaid on time.
State-by-state guides
Titles, stamp duty and land tax are run by each state and territory, so local rules change the cost and timing of a loan. Read the guide for where the property is: Victoria, New South Wales, Queensland, Western Australia, South Australia, Tasmania, ACT and Northern Territory.
Frequently asked questions
Is private lending regulated in Australia?
Yes, in parts. Consumer loans fall under the National Credit Code and need a credit licence. Business-purpose loans are mostly outside that code, but general laws on misleading conduct and unfair contract terms still apply. See [is private lending legal](/is-private-lending-legal-in-australia).
Are private lenders more expensive than banks?
Usually, yes. Interest is typically higher and there are often extra fees such as establishment, legal and valuation costs. Use the [cost estimator](/tools/cost-estimator) with the figures from any offer you receive.
Related guides
- Private credit Australia: how property-backed lending works
- Private lenders in Victoria
- Private lenders in New South Wales
- Private lenders in Queensland
Glossary: valuation, combined lvr
Run the numbers
Test cost and timing with the matching calculator before you speak to anyone. Then send one enquiry to finance providers.
Cite or share this guide
Privet (2026). Private lending Australia: how it works in every state. Retrieved from https://privet.com.au/private-lending-australia
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