Out of all the finance options available from financial institutions in Australia, one of the most common is a Personal Loan. What is it about Personal Loans that make them such a popular choice when Aussies need to borrow money?
In this post, you’ll discover why Personal Loans are often the finance option of choice, the general procedure to get a Personal Loan and how to find the right lender for your requirements.
A Personal Loan Is Versatile
Car Loans and Home Loans are very specific types of loans designed for a set purpose. When you get a car loan you’ve been approved for finance to buy a car. It’s the same with a Home Loan. However, a Personal Loan is quite different, as the purpose of the loan can vary. What you can spend the money on will differ from lender to lender, but you’re not restricted to a specific purchase.
On the subject of what Personal Loan funds can be used for, banks and other lenders will ask you what you intend to spend the money on. You’ll be given a number of choices, such as home improvements, travel, medical, but it also usually includes a category called “Other”, where you can specify something that’s not on the list.
Where Can I Get a Personal Loan?
When it comes to Personal Loans, Australia has so many options available to borrowers. You’ll discover that most lenders will offer some form of Personal Loan option. You can apply for Personal Loans with most:
- Banks
- Private lenders
- Building societies
- And more…
In fact, there are so many choices out in the finance market that it can often be confusing. One of the best ways to sort out the confusion and save some time is to visit websites that compare Personal Loans from different lenders side by side.
At a glance you can see the current interest rates being offered, loan establishment fees (if any), loan terms and the minimum and maximum amounts you can borrow. This kind of comparison chart simplifies the process as every financial institution is a little different.
One may offer lower interest rates but a much higher loan establishment fee, along with monthly admin fees. It’s well worth taking your time and doing your research thoroughly before deciding which Personal Loan you’ll choose to apply for. It’s a commitment, so you’ll want to make the best choice.
The Personal Loan Procedure
You would have to check with each individual lender to determine the exact application method, but one aspect that’s common among just about all lenders these days is that you can do the Personal Loan application online. Usually you won’t have to visit a branch unless there is some specific requirement due to your personal circumstances.
Banks tend to have more detailed application forms than, say, a private lender, but all will ask for your personal details, proof of income, your expenditure and liabilities, how much you wish to borrow and how many months or years you need to repay the loan.
Supporting documentation in the form of proof of identity and income will also be required, which you can usually upload as an attachment with your application form, or forwarded in an email.
If your application is approved you should be able to sign the contract electronically as well and send it straight back to the lender for processing and payment of the borrowed funds to your nominated account.
Banks generally require you to visit a branch to finalise the application, whereas a private lender will manage the entire process online.
Being able to do the loan application from the comfort of home, in your own time, is yet another reason why Personal Loans, particularly with private lenders, are so popular.
The Takeaway
Not only are Personal Loans one of the most common loans on the market, but you also have more options regarding what you can spend the money on. Almost all finance companies will offer the Personal Loan option in their suite of financial products, however choosing a private lender will ensure your applications can be completed 100% online.
If you need money for just about any purpose, a Personal Loan with a private lender is your best bet.
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