101 Guide On Different Loan Options Available In Australia

By May 11, 2020 August 5th, 2020 Pawn Loan, Personal Loan

Australians are fortunate when it comes to the world of finance. There are a multitude of options available to business owners and everyday Aussies when you want to borrow money for a specific purpose, or even simply to bolster your cash flow.

In fact, there are so many loan options in Australia that it can get confusing. What kind of loans are available? Which is the best loan option for a specific purpose? Should you approach a bank for a Personal Loan or try a private lender? Is there a way of comparing the loan options available?

These are all fair questions and in this post, we’ll provide answers to those questions so you have a better idea of what’s available and which might be the best finance option for your needs.

Banks vs Private Lenders

Is one of the banks a better option for finance than a private lender or vice versa?

There is no definitive answer because both banks and private lenders have something positive to offer when it comes to a variety of loans. Your personal circumstances, how quickly you need the money, what type of loan you are chasing and how much money you need all come into the equation.

For example, if you’re looking to borrow a million dollars to purchase your dream home, seeking out a mortgage with competitive rates with one of the banks would likely be the obvious choice. On the other hand, if you only wanted to borrow a small amount of money, banks generally don’t offer small loan options. In this instance, the private lender will prove to be your best friend.

Both have their advantages and both will always play a role when it comes to lending money to Australians for all sorts of purposes.

Let’s now take a look at the different types of loans and their features.

Personal Loans

Personal Loans are one of the most common and popular forms of finance in Australia. One reason for this is you can use a Personal Loan for practically anything.

When you apply for a personal loan you’ll be given a list of options regarding what you will use the money for. While car loans and home loans are restricted to cars and homes exclusively, personal loans offer a variety of choices.

Banks will offer Personal Loans ranging from about $5,000 up to $50,000 or more, which is a handy range that covers most people’s needs. One downside with this though, is that people don’t always need to borrow a minimum of $5K.

A perfect example might be a small emergency, where just a few hundred dollars, or maybe a few thousand dollars, is enough to get you out of a tight spot. Banks don’t offer Personal Loans in these smaller denominations but private lenders do. Private lenders will allow you to borrow much smaller amounts of money, to be repaid over a shorter term. It’s really the perfect solution when you need some quick cash that’s not in the high four or five figures.

Mortgage Loans

Mortgage Loans are the type of loans that so many Australians require at some point in their adult life. There can be some confusion about the term ‘Mortgage Loans’ though, as there are actually two types.

The first is where you ask your bank for a Home Loan so you can purchase a property and pay it off. This is one of the most common loans in the country, with many Aussies chasing the Great Australian Dream – home ownership. Next to Personal Loans, a Home Loan is one of the most sought after loans there is.

When it comes to Mortgage Loans, the other option is where you take out a smaller loan against the value of your property for other purposes, a common one being home renovations and remodelling. In reality, a Mortgage Loan can be used for many purposes, but renovating is certainly one of the most common.

Now while banks do offer this type of loan, private lenders often offer far more reasonable terms when it comes to Mortgage Loans. Most private lenders offer Mortgage Loan amounts of between $5,000 and $100,000, which is more than enough for most homeowner’s needs. You can even use your Mortgage Loan to build that backyard swimming pool you’ve been dreaming of.

Pawn Loans

A Pawn Loan is one of the more interesting types of lending. We’re not talking about getting a small loan from a pawnshop, but rather loans of more substantial amounts from private lenders that offer a Pawn Loan option.

If you’re unaware of what a Pawn Loan actually is, it means offering something of value as security against the loan. A perfect example of a Pawn Loan from a private lender is to leave your car with them as collateral against the loan. When you repay the loan in full, you get your vehicle back in the same pristine condition that you left it.

The really great thing about Pawn Loans is it doesn’t matter if you have a bad credit record or even no credit score. You can still get a Pawn Loan. You can even get one of these loans if you’re unemployed, casually employed or self employed. You just have to be certain you have the means of repaying the loan so you can get your car or other valuable item back.

With Pawn Loans you can loan against:

  • Cars
  • Motorcycles
  • Caravans
  • Boats
  • Jewellery, watches & valuables
  • Business equipment
  • Company vehicles
  • And more…

Pawn Loans For Businesses

Whether it’s a start-up or an established business, many commercial ventures will need extra capital and cash flow for a variety of reasons. One of the most common would be for business expansion. Another reason might be to fulfil a very large order.

Whatever the requirements, businesses have a number of options at their disposal. Banks offer Business Loans as well as lines of credit and overdraft facilities to help with consistent cash flow. Some Business Loans are secured loans with lower interest rates while others are unsecured.

Pawn Loans are also available for businesses, where company vehicles or business equipment can be used as collateral against the loan. Loan amounts can range from $2,000-$500,000, sometimes even higher, depending on what the business has to use as security. These are short-term loans designed to instantly give business cash flow a boost right when it’s needed the most.

So long as you can prove complete ownership of the vehicles or equipment you wish to use to secure your loan and can provide 100 points of ID, you’ll be good to go for a Business Pawn Loan.

Fast Cash Loans and Emergency Loans

If you need finance fast, then a bank isn’t really going to be a viable option if you’re dealing with an emergency. Banks can take a considerable amount of time to process and approve loan applications, time you might not have.

For fast cash loans and same day loans you’re best off approaching a private lender.

Lenders in the private finance sector focus on speedy results. It’s one of the key advantages they have over the banks. Applications can be done online for a fast cash Personal Loan and the process only takes a few minutes. There is also hardly any documentation required and often the application will be processed and approved on the same day; meaning you get your cash by the end of that day or the next business day.

You can borrow anywhere from a few hundred dollars to a few thousand dollars, depending on the lender. Interest rates are fair and repayment terms are short so you’re not stuck repaying a debt for a lengthy period of time.

Quick cash loans from a private lender are your best bet when faced with an emergency or any scenario where you need money fast.

The Wrap

There are loads of options for finance available to every Australian individual and business, with both banks and private lenders offering some great deals, depending on your circumstances and requirements.

Cashify is your premier private lender for small, fast Personal Loans, Mortgage Loans and a fantastic range of Pawn Loans. No matter what you need the money for, make us your first choice the next time you need finance.

Disclaimer: Please note this content is of general nature only and does not take into account your personal objectives, financial situations or needs. For advice tailored to your financial situation, it is advised that you seek guidance from an accountant or financial advisor. The information contained in this article is correct at the date of publication.