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Personal loans

Do you have your eye on something that you’d like to get access to today?

A personal loan may be the answer.

What is a Personal Loan?

Personal loans are a once-off payment of cash to the borrower who then repays the loan plus interest over (typically) one to seven years.

Personal loans are often for specific items such as a car, wedding, home renovation or holiday.

The biggest factors that can influence how much you end up paying back are choosing between and fixed rate or variable rate personal loan, and deciding between secured or unsecured.

Fixed or Variable

With a fixed interest rate, your repayments are fixed for the term of the loan. This gives you the security of knowing how much your monthly repayments will be which can be a real bonus when it comes to budgeting and financial planning.

On the other hand, a variable rate loan means your monthly repayments are tied to the current interest rate so your monthly repayments can fluctuate over the term of the loan. If interest rates go up, your repayments will go up. If interest rates fall, so will your repayments.

Because lenders take a degree of risk when they fix interest rates, they can put restrictions on the loan to protect themselves. For example, they may have penalties if you pay out the loan early. 

Because of the lower risk, lenders are usually able to offer better conditions on variable-rate loans so there are usually no early repayment fees with this type of loan. This can be a benefit if there is a chance that you might want to pay the loan back early.

Variable rate loans may also allow you to make extra repayments over the term of the loan which will lower your overall interest repayments and save you money.

As with all lending, things like your credit score, savings, income and outgoings can all affect the interest rate that you will be charged. For this reason, it’s a good idea to speak with someone who understands what the lenders are looking for and can help you present your application in the best possible light.

Secured or Unsecured

With a secured loan, lenders will take a charge (security) over an asset you own or are purchasing to have collateral behind the loan. This also gives them the ability to repossess said asset in the unlikely case that you default on your payment and are unable to finalise your loan. 

Unsecured loans don’t involve providing an asset as security however, they are riskier to lenders and, to mitigate that risk, they usually have slightly higher interest rates.

Apply for your Loan

The best way to find out what personal loan you qualify for is to speak to the experts at Alegra Finance. We can help sort through the maze of loans and help get you that car, boat, holiday, renovation or other thing that you’re after.

Take the first step to secure your finance by phoning or emailing below

(08) 7084 1278