What is a
Personal Loan?
Make that daydream a reality.
It could be for that well-deserved getaway, or it could also be for a car or getting that deck in the house fixed. No matter what, Loan Options can get you there!
Comparing your options will get you the best deal for your circumstances. To give you a head start when you start your search, consider:
The Right
Interest rate.
Seen interest rates on the news more lately? Let’s break it down: Interest rates are the amount that you pay calculated on the balance of the loan each year. This can vary based on your lender or bank, whether the loan is secured or unsecured, and the type of loan you are looking for. As a borrower, you’re always looking to get the lowest interest rate possible.
The Reserve Bank of Australia (RBA) also has a big influence on banks and lenders’ interest rates. The RBA sets the cash rate, which has a run-on effect depending on whether lenders choose to pass on the increases or decreases onto borrowers.
Fixed or Variable?.
For a fixed personal loan: the interest rate (yes, you guessed it) stays fixed. This means your repayments will stay the same for the entire loan term. Its popular for its stability. However, having a fixed rate can sometimes come at the cost of flexibility and the rates won’t lower if the market goes down. A fixed interest rate loan is a good option if the current interest rate is low, or you predict it rising. For personal loans, fixed loans are fixed for the life of the loan. Please note, that you may have to pay extra costs if you want to pay off a fixed loan early.
✅Fixed for the loan-term
✅Certainty for budgeting
✅Automatic repayments
❌Repayment costs (break costs and early repayment fees)
❌Miss out on future interest rate reductions
For variable interest rates: your repayments can fluctuate over the life of the loan term. You can also, should you wish, make unlimited additional payments to repay the loan early (subject to any hidden fees). Variable personal loans often also come with a redraw facility with lenders. This means you can withdraw from your additional repayments on a rainy day, or for whatever reason you need it.
✅Fewer early repayment costs
✅More flexibility
✅Redraw facilities (withdraw cash from extra repayments)
❌No buffer from interest rate rises
No matter what you’re after - fixed or variable - in any case, you’ll need a thorough comparison to get the best loan.
Our proprietary AI technology thoroughly analyses and processes data securely from your application against these variables and more across 100s of financial products from 60+ banks and lenders to give you the most suitable matches for your needs and personal circumstances. All in as little as 20 minutes!
Our tool will not only match you with the best rates available using real-time data, but with the lenders that you’re most likely to get approved with.
We have said it before, and we’ll say it again, not every loan is the same! When you are applying for a loan it can be either an unsecured or secured loan.
Finding the right loan can be confusing and to make it easier we’ve defined the below.
Secured.
A secured loan uses the asset being purchased, in this case the car, as security for the loan. If the borrower can’t repay the loan, the lender can reclaim the asset to cover the costs. Although if the sale of the asset doesn’t cover the full amount owing, the borrower must pay the difference.
The benefits of secured loans is that they usually result in achieving a lower interest rates, due to the lower risk factors from a lenders point of view
For those hunting for Australia's finest personal loans, Loan Options emerges as a prime choice with our cutting-edge AI for comparison and matching. With our advanced technology we're able to easily and thoroughly compare personal loan rates across different specifications and lenders.
Our platform eases the search for the best loan rates, ensuring a fit with your financial needs and situation.
In summary, whether you're in the market for the lowest personal loan rates or a loan with bad credit, thorough exploration and comparison are indispensable. Grasping the available loan types, securing the most favourable rates, and managing your loan wisely pave the way to a fruitful borrowing journey. Loan Options stands ready to assist, employing advanced technology to match you with the ideal personal loan.
Ready to learn more?
Get to know the brilliant humans behind LoanOptions.ai or get some burning questions answered with our FAQs.
Secret fees.
The devil is in the details, and it can be more than a pain if you do not read the fine print properly or if not all associated fees are brought to your attention as a borrower.
Ask yourself these questions:
Are there any entry or exit fees?.
Entry/Exit Fees
Late Payments.
What are the late repayment fees?
Early Payments.
Are there fees for paying your loan off early?
Added Costs.
Are there any other added costs that could come up?
Still have questions?
If you have any questions or enquiries,
visit our FAQ bunker or give us a call
After applying and getting approved for a personal loan, you receive a lump sum of money upfront. You then repay this amount, plus interest, over a fixed term, usually through monthly payments.
Loan amounts can range from a few thousand to several tens of thousands of dollars, depending on the lender, your creditworthiness, and your financial situation.
The time to get a personal loan can vary from one day to a few weeks, depending on the lender and your application's complexity.
Many lenders allow early repayment of personal loans without penalties, but some may charge a prepayment fee. Check your loan agreement for details on early repayment terms.
No, simply searching for a personal loan lender does not hurt your credit score. When you initially look for personal loan options, lenders typically perform what is known as a "soft inquiry" or "soft pull" to give you a preliminary offer. Soft inquiries do not affect your credit score, allowing you to compare rates and terms from multiple lenders without any impact.
However, once you decide to proceed with a specific lender and apply for a loan, the lender will then conduct a "hard inquiry" or "hard pull" on your credit report to make a final loan decision. Hard inquiries can lower your credit score by a few points and remain on your credit report for two years, although the impact usually diminishes over time. Therefore, it's wise to do your research and only apply for a loan when you're ready to commit to an application with a specific lender.
Applying for a personal loan can cause a temporary dip in your credit score due to the hard credit check. However, making timely payments can positively impact your credit score over time, while late or missed payments can hurt it.
Yes, a personal loan can be refinanced. Refinancing a personal loan means taking out a new loan to pay off an existing one. This can be a strategic move to secure a lower interest rate, reduce monthly payments, or change the loan term. When considering refinancing, it's important to compare the terms, rates, and fees of your current loan with potential new loans to ensure refinancing offers a financial benefit. Keep in mind that applying for a new loan involves a credit check, which can impact your credit score temporarily. Additionally, some lenders may charge origination fees or prepayment penalties, so it's crucial to review the terms and conditions of both your existing loan and the new loan before proceeding with refinancing.
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