A personal loan can be used for a range of purposes, from travel to home renovations to medical procedures.
Applying for finance can seem complicated but it is actually easier than ever to take out a personal loan. Here are some important steps to follow when applying for a personal loan.
Before you apply for a loan, it’s important to know that you can afford it. Figure out how much you need to borrow and if this is within your budget.
Once you know how big your loan amount is, you can use a loan calculator to work out your repayments over the loan period. They may be weekly, fortnightly or monthly, and once you see what your recurring repayments will be, you can choose the frequency that best fits within your budget and is maintainable on an ongoing basis for the duration of your loan term.
Put down as big a deposit as possible when taking out a loan. This will reduce the amount left to pay off, which can help lower your interest rate.
You need to be able to keep up with your repayments for the entire loan term. Consider if your situation changes which may impact your financial standing, such as losing your job, moving, or starting a family, and how this may impact your ability to pay off your loan.
Always make sure you can afford to pay off your personal loan, no holiday is worth putting yourself in a difficult financial situation.
There are various finance options and loan types, so you need to find the one that best suits your situation. Consider what you’re planning to use the loan for, if it’s to buy a new vehicle, you may be better off applying for a car loan, or if you’re looking to finance a new business venture, a business loan may be for you.
If you’re not sure if a personal loan is the best option, it’s a good idea to get advice from a finance specialist.
For personal loans, most lenders will offer unsecured loans and secured loans. Unsecured personal loans do not require an asset to be held as security for the loan, whereas secured loans do require an asset being held as security.
Check any additional fees and charges associated with your loan. This could include establishing fees, or charges for paying off your loan early, and may differ depending on the loan type and lender.
A loan calculator may help you decide if the loan is right for you. It can give you an idea of the costs involved and help you work out how long it will take you to pay off the loan. Loans terms are generally between 1- 7 years, and remember the shorter the loan term, the less interest you pay overall.
Don’t rush the process of researching and applying for a personal loan. Take time to find the best option for you.
With many lenders and banks offering various loan options, shop around to make sure you get the best rates you can. Numerous factors can impact the rates you get, from the loan amount and terms to your personal situation.
Check your credit rate. A good credit score can help you get better rates on your loan, though keep in mind that every time you check your credit score it is impacted.
Some lenders may require you to have a good credit rating, but if you have a bad rating, there are still options for getting finance. If you have a bad credit score, you may have to pay higher interest rates, but you can look at the option of refinancing down the track once you’ve built up your credit rating.
Rates can also depend on the type of loan you choose. Talking with a finance specialist may help give you advice on what is best for you.
The application process for a personal loan can vary depending on the lender. You may be able to apply in person, over the phone or online.
You’ll need to be at least 18 years of age, and be an Australian citizen or permanent resident to apply for a personal loan.
Get the necessary documentation ready. You’ll need to provide proof of residence and a driver’s license. You’ll also need to show proof of regular income by providing recent payslips. This will show proof of your ability to pay back your loan.
Once your loan is approved, you will be sent final documents to sign, and then you should have access to your loan funds.
Making multiple loan applications to different lenders within a short period can negatively impact your credit rating. Carefully consider your options before applying to ensure you apply for one most suited to your needs and budget, and consider factors such as features and costs of loans, and your eligibility.
360 Finance make the process as quick as easy as possible, so you can get the loan you need when you need it. By comparing loans from over 30 lenders, we will help find the best rates for you. Whether you’re after a personal loan, car loan, business loan or another type of finance option, contact the team at 360 Finance.