Cars, Not Credit Cards: What More Than a Million Loan Applications Reveal About How Australians Borrow

^{About This Data}

^{This report is based on aggregated, anonymised application data collected across Friendly Finance and its partner lending brands, covering the five quarters from April 2025 to June 2026 (the final quarter is partial). It draws on more than one million loan applications. Figures for income and living expenses are derived from verified bank-statement data and reflect per-customer monthly averages. No personally identifiable information is used or disclosed in this report.}

^{An exclusive data report from the Friendly Finance group's data hub, drawing on application data from Friendly Finance and its partner lending brands.}

Key Takeaways:

• Cars, not luxuries, drive borrowing. Car maintenance and registration is the single most common reason Australians take out a personal loan — almost one in four applications where a purpose was given.

• The typical borrower is young and working. Around 38% are aged 26–35, construction is the most common industry, and NSW and Queensland together make up over half of all applicants.

• Modest loans against a real income buffer. The average loan sat around $3,485 (peaking at $3,727 in late 2025), while bank-statement data shows average monthly income (~$5,050) running roughly three times essential living expenses (~$1,730).

Ask most people why Australians take out a personal loan and they'll guess holidays, weddings, or paying off the credit card. The reality, according to more than a million loan applications submitted across the Friendly Finance group's lending brands over the past five quarters, is far more practical: it's the car.

Car maintenance and registration is the single most common stated reason Australians borrow — accounting for almost one in four applications where a purpose was specified. It's a quietly revealing finding. The thing most likely to send an Australian looking for a few thousand dollars isn't a luxury or a lifestyle upgrade. It's keeping the car on the road so they can get to work.

Here's what five quarters of data — from April 2025 to June 2026 — tells us about who's borrowing, why, and what their finances actually look like.

Why Australians Borrow

When borrowers tell us what the money is for, the list reads like a household running-costs ledger rather than a wish list:

1. Car maintenance & registration — the clear leader, roughly 24% of specified-purpose applications

2. Medical & dental — around 17%, the second most common reason

3. Home improvements, goods & furniture — about 9%

4. Personal care — close behind

5. Mortgage, rent & bond — housing-related costs round out the top five

Travel and holidays exist in the data, but they sit well down the list. The top of the table is dominated by the unavoidable: getting to work, staying healthy, keeping a roof overhead. The everyday cost-of-living squeeze isn't an abstraction here — it's written into what people borrow for.

Who's Borrowing

The typical applicant is younger and working than the stereotype suggests.

Age: More than a third of borrowers (around 38%) are aged 26–35, with another quarter aged 36–45. Together, that's roughly six in ten borrowers in their late twenties to mid-forties — the family-forming, career-building, cost-absorbing years. Borrowers over 55 are rare.

Work: This is a working, hands-on borrower base. Construction is the most common industry by a clear margin, followed by healthcare and social assistance, transport and warehousing, retail, and hospitality. These are the industries that keep the country physically running — and they're the ones most likely to be turning to a personal loan.

Location: Borrowing skews to the east coast. New South Wales (31%) and Queensland (27%) together account for well over half of all applications, with Victoria (20%) a clear third. Beyond the capital cities, outer-suburban growth areas and regional centres feature prominently among the top locations.

How Much, And The Trend

The average loan size grew steadily through 2025, climbing from about $3,101 in the April–June quarter to a peak of $3,727 in October–December — the run-up to Christmas and the new year. It then eased back to $3,485 in the first quarter of 2026.

These are modest sums by the standards of consumer credit. They're not debt-consolidation-sized or big-ticket purchases; they're the amounts that cover a blown transmission, a dental bill, or a quarter's worth of catch-up on the essentials.

The Financial Picture

One of the more reassuring findings comes from the verified bank-statement data behind these applications. Across all five quarters, the average applicant's monthly income sat at around $5,050, against average essential living expenses of about $1,730 — leaving a typical monthly surplus of roughly $3,300 before the loan.

In other words, the data doesn't describe people borrowing beyond their means. It describes working Australians with a genuine income buffer using small, purpose-driven loans to smooth out the lumpy, unavoidable costs of everyday life.

What it Means

Put together, the picture is consistent and humanising. The Australian personal-loan borrower is most likely to be in their late twenties or thirties, working in a trade or a frontline industry, living on the east coast, earning a steady income — and borrowing a few thousand dollars to deal with something practical, most often the car.

It's a useful corrective to the assumption that personal loans are about indulgence. For most of the people in this data, they're about keeping life moving.

This article is general information only and does not constitute financial advice. Consider your own circumstances, and seek independent advice, before taking out any credit product.

Curious where you'd fit? Find a loan that suits your situation with Friendly Finance.