A Guide To Getting A Personal Loan In 2020

By April 17, 2020 August 5th, 2020 Personal Loan

If you’re shopping for a Personal Loan, Australia is a nation where you’re spoilt for choice. The great thing about a Personal Loan is you can generally use the money for just about any purpose. These loans are so popular and versatile that nearly all lenders – large and small – offer this type of finance.

There are some things you’ll want to consider before committing to a loan with a particular lender, so in this guide, we’ll offer some tips on how to secure the right loan for you and get quick cash into your bank account.

How Much are You Looking to Borrow?

The banks tend to put a minimum on their loans, usually around the $5,000 mark. If you are wanting a lesser amount and a smaller commitment, you’ll need an alternative to the banks. This is where an independent lender can help you out.

If you search for fast cash loans or same day loans you’ll find a selection of lenders that offer smaller, affordable personal loans starting at around the $500 mark.

For recipients wanting to borrow large sums of money, you’ll likely target the banking sector, but if you’re chasing a small Personal Loan, then a fast cash lender is the best option.

Compare Interest Rates

Some lenders will have high monthly interest rates but no loan establishment fee. Other financiers might offer the opposite, where interest rates are reasonable, but charge a high fee upon loan approval. In addition, some lenders will also offer you flexible interest rates based upon your credit history – i.e. the better your credit rating, the lower your interest rate will be. To be sure, it is always best to check the lender’s website or simply ask for their interest rate if unsure.

Do You Meet the Lending Criteria?

With most Personal Loans being unsecured, all lenders will have criteria that applicants need to match up to. If you can’t meet all the criteria, there is a good chance your application for finance won’t be approved.

Some of the standard criteria will include the following:

  • Must be at least 18 years or over
  • Earn an income (not solely Centrelink)
  • Be able to prove your income
  • Proof of identity
  • Be a permanent resident or Australian citizen

There may be more criteria to satisfy, depending on the financial institution or the loan amount you’re after.

How Fast Do You Need the Money?

Banks can take forever to make a decision when it comes to getting finance. There are regular requests for more documents and other paperwork, phone calls, possibly requests to visit the branch and speak to someone face-to-face. Sometimes it can take a month to get a decision one way or the other.

If a bank loan is really what you want and you’re not after instant money, then applying for a loan with a bank is fine. It may not be the ideal route for everyone though.

In the case of an emergency or some other urgent need, quick cash is what you’ll want. Smaller lenders offer same day loans and fast cash loans, where the application and approval process is lightning fast. This puts the cash in your bank account almost instantly upon signing the contract.

Consider the Terms of the Loan

How long you get to pay off a Personal Loan can depend on several factors, such as the amount you wish to borrow, the terms the lender offers, and how long you would like to pay it off. Keep in mind that the longer you take, the more interest you’ll pay over the life of the loan. On the plus side, longer terms lower your weekly or fortnightly repayments, making them more manageable and easier to budget for.

Larger loans from a bank might give you the option of between 1 and 7 years to pay out the loan, whereas with private lenders offering smaller loans, the terms could be somewhere from 3 months to 24 months to repay the borrowed amount.

The Wrap

Once you have a fair idea of how much you wish to borrow, how quickly you need the money, and how long you’d like to have to pay off a loan, the easier it will be to seek out the right lender for you. It’s always wise to consider your options and requirements first and not rush into a financial commitment. Talk to the team at Cashify and discover how we can help you with a Personal Loan that suits your needs.

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.